Wildfire Risk and Insurance Industry Response in the 21st Century
Explore the evolving landscape of wildfire risk management and insurance responses in the 21st century, focusing on initiatives to address challenges such as California wildfires and the role of reinsurance in maintaining affordable coverage. Discover how industry leaders are adapting to climate change impacts with innovative solutions and strategic partnerships.
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Presentation Transcript
Climate Change: Response & Resilience Leadership Forum Where s There s Smoke, There s Fire: Wildfire Risk in the 21st Century John Huff President and CEO Association of Bermuda Insurers and Reinsurers RenaissanceRe Risk Sciences Foundation, November 20, 2019
Bermuda: The Risk Capital of the World Source: NPR Bermuda's leading property and casualty insurers and reinsurers: Generate income from 150 countries Wrote USD$100 billion in global gross written premium (CY 2018) Aggregate global capital totaling USD$120 billion (CY 2018) Bermuda re-insurers ~36% of the global P&C reinsurance market (2018 AM Best) Provide more than 60% of the hurricane reinsurance in Florida and Texas 25% of reported reinsurance losses for the 2016 Alberta, Canada wildfires Represent14 of world s top 40 reinsurers Have paid over a USD quarter of a trillion to U.S. & EU consumers in past 20 years www.abir.bm
How is the industry responding to the California Wildfires California to expand last-resort fire insurance plan for homeowners With more destructive wildfires burning California, insurance companies are increasingly declining coverage to homeowners. Mercury News Source: NPR After wildfires, hundreds of thousands of Californians can't get insurance BY ED LEEFELDT AUGUST 30, 2019 / 10:55 AM / MONEYWATCH As Wildfires Get Worse, Insurers Pull Back From Riskiest Areas
Hurricane Andrew in 1992 California Wildfires in 2018/2019 Wakeup call delivered by Hurricane Andrew. More carefully managed coastal exposure. Larger role of government in insuring coastal risks. Introduction of hurricane deductibles. Greater use of reinsurance capital from Bermuda & around the world. The birth and rapid evolution of sophisticated catastrophe modeling. Strong support for strengthened & enforced building codes + enhanced mitigation. exposure. Larger role of government in insuring high risk areas Introduction of wildfire deductibles. Greater use of reinsurance capital from Bermuda & around the world. The birth and rapid evolution of sophisticated wildfire modeling. Strong support for strengthened & enforced building codes + enhanced mitigation. More carefully managed high risk
Viewpoints: Former Commissioner View: Number one concern in your market is to maintain accessible and affordable coverage through risk diversification (reinsurance). Reinsurer View: Use analytics to assess and price risk through selection of non-correlated risks. Consumer view: Protect assets, Family and Community Source: CNN
Thank you to ABIR Members Bermudas Leading Insurers & Reinsurers ABIR Broker Advisory Cabinet: Bermuda relies on our exceptional broker teams. Thanks to our jurisdiction s largest brokers, Aon, Marsh/Guy Carpenter, and Willis Towers Watson, for creating a path many can follow. Twitter: ABIR_Bermuda 7
