Munich Re: Natural Disaster Rise Should be Considered in High Risk Area Premiums

Munich Re, a reinsurance company headquartered in Princeton, N.J., was featured in an article this week from Reuters, “Reinsurers should price in rise in natural disasters –Munich Re.”

The article states that “climate-driven disasters accounted for US$510 billion of insured losses in North America between 1980 and 2011, the highest amount anywhere for claims against natural catastrophes,” according to a recent Munich Re study.

Reinsurance, by definition, is insurance for the insurance industry. There is a “natural tension,” between consumers and the industry on risk-based increases in premiums, but it wasn’t until the 60s or 70s that construction increased in North America in more high-risk areas, said Frank Nutter, Reinsurance Association of America President, in a recent GAIN Insight video interview

NJ - Hoboken: Nor'EasterBesides considering higher premiums for high-risk areas, Munich Re also suggested that more measures “such as better risk modeling capabilities, tighter building regulations and better flood management” should be taken into account.

To read more of the Reuters article by Sarah Mortimer, click HERE

Photo courtesy: Wally Gobetz (Creative Commons)

GAIN Insight: Frank Nutter, Reinsurance Association of America President