Rates may continue to harden into Jan 1, 2024 renewal
Robert Fauber , Moody's President & Chief Executive Officer
The unique nature of many of the catastrophes that occurred last year, as well as many near-misses, should represent a timely reminder of the importance of understanding, managing, and pricing future weather-related risks – and of reviewing contract wordings, according to a report by Moody’s RMS.
The Moody’s RMS 2022 Catastrophe Review, noted the propensity of secondary perils last year such as floods, wildfires, and severe convective storms – along with large exposure changes, social inflation, and non-modeled losses. They have contributed significantly to overall economic and insured losses over the past five years, the report notes.
Specifically with regard to floods, there are additional increasing trends of losses across the US, Europe, Asia, Australia, and Latin America, the report notes. The previous “century return” period for floods is much shorter, mainly due to climate change, authors suggest.
It also noted that 2022 saw the return of real-time in-person reconnaissance following the restrictions of the COVID-19 pandemic. This on-the-ground approach provided valuable insights in the aftermath of Hurricane Ian, including the imaging of 430,000 buildings, during this unique and historic event.
The report also covered the impact of Hurricane Ian in great detail. It acknowledges it was the event that defined the 2022 North Atlantic hurricane season. It was also a complex and devastating event with a number of contributing modelled and non-modelled loss factors. It is likely to be one of the top loss-producing U.S. hurricanes on record.
Given its impact, it acknowledges it could well have a significant impact on the way in which the Florida insurance market operates long term.
Moody’s RMS, Cat landscape, Weather-related risks, Insurance, Reinsurance, Bermuda