The 2017 Hurricane Season brought over $100 billion in insured losses. According to John Kapitan, an SVP at RMS, “the (insurance) industry has coped well.” There are numerous improvements in the industry since the storms of 2004/2005. The industry is better capitalized, (over $600 billion). From a risk management perspective, Mr. Kapitan says few insurers or reinsurers were surprised by the magnitude of losses. “It’s business as usual.”

Looking ahead, Mr. Kapitan sees a few lessons learned that can improve the management of hurricane risks. He says nearly 90 percent of losses from Hurricane Harvey were flood related. It highlights a protection gap that exists in personal and commercial lines. Mr. Kapitan sees an opportunity for the industry to supply more coverage and grow as a result.

Mr. Kapitan believes the models will get better as a result of the 2017 storm season. There will be improvements in data capture and utilization. He also points out that we are in the early stages of using Big Data, not just in personal lines, but also in analytics used for middle market and large commercial risks.

For more information, visit the RMS website.

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