Severe storms can cause a great deal of damage. For example, hail and wind from such storms can end up significantly damaging homes, businesses and motor vehicles. The damage from severe weather can have big financial implications for many parties.
This includes insurance companies. This is because such companies can receive significant claims (such as large auto insurance or property insurance claims) from policyholders in connection to severe weather damage. An insurer’s overall financial situation following a storm can be greatly impacted by what ends up happening with such claims. So, ensuring the handling of storm-related claims and any disputes or problems connected to them is done properly can be important for an insurance company.
Recent data indicates that insurance payouts for severe-weather-related damage reached particularly high levels at the front half of this year. According to this data, $15.5 billion in such payouts were made in the first half of 2017 here in America. This is the second highest weather-related payout total on record.
High amounts of claims and payouts for severe weather can create some significant challenges for insurers. Multiple large insurers here in the U.S. are expected to show losses over recent months. The high weather-related payouts are thought to be a contributor to this trend.
How long do you think the trend of high amounts of storms and storm damage claims will continue here in the United States? If these trends remain for a sustained amount of time, how do you think insurers will respond to them?
Source: Insurance Journal, “Insurers Pummeled by Car Dealers’ Claims for Hail-Damaged Vehicles,” Suzanne Barlyn, July 24, 2017