“I think this will eat into (European reinsurers’) first-quarter natural catastrophe budget,” Shuck told The Insurer on Friday, January 10. “We’re only 10 days into the year so there are probably other things going on, but I don’t see it as a big deal for reinsurers as they’ve reduced coverage for wildfires and people have been worried about these types of situations for quite some time.” “.
In recent years, many reinsurers and insurers have stopped writing new policies in high-risk areas, such as Southern California, due to increasing losses and the difficulty of modeling risk.
According to Shuck, the ongoing fires are likely to cause major rate adjustments, making some areas of Southern California effectively uninsurable for homeowners, increasing the need for reform and federal government intervention.
“I don’t see it as a major development for reinsurance,” Shuck said. “It is another example of climate change and preventive action by insurers to try to get away from losses not modeled in this case. In the first quarter it will consume budgets.”
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