Morning Briefing: Global disasters in May cost insurers $7 billion

Morning Briefing: Global disasters in May cost insurers $7 billion

Morning Briefing: Global disasters in May cost insurers $7 billion Global disasters in May cost insurers $7 billion
A surge in natural disasters in May will cost the insurance industry at least U$7 billion with North America accounting for the largest share.

The latest Global Catastrophe Recap from Aon Benfield’s Impact Forecasting highlights the Canadian wildfires as the largest single event in terms of claim costs – U$3.1 billion / C$4.0 billion.

"The severity of the wildfire damage in Fort McMurray is an unfortunate reminder of how significant insurable losses can be from the peril. Since this is just the sixth individual global wildfire to surpass the billion-dollar threshold for insurers, there is not a lot of precedent for a fire event of this magnitude," said Adam Podlaha, Global Head of Impact Forecasting.

The US saw five severe connective storms in May hitting the Plains, Midwest, Mississippi Valley and Texas; total aggregated losses are expected to be around $1 billion.

Large parts of Europe were hit by storm ‘Elvira’ resulting in an estimated $2.3 billion of claims payouts; and in Asia, Cyclone Roanu led to insured losses of around $1.7 billion.
Short-term health plans may be curbed
The US government may move to restrict the use of short-term health insurance plans. CNBC reports that the plans are increasingly popular and are taking healthier customers away from other coverage.

The proposal would mean a 3-month limit on the length of these plans with no renewal allowed. Currently some ‘short-term’ plans run for almost 12 months.

The HHS will run a 60-day public consultation on the proposal but if the rule is implemented it is likely to leave some customers without coverage as, on expiry of the 3-month policy they will need to wait until the next open enrolment before obtaining new coverage.
Cost, confusion lead to insurance avoidance for millennials
A survey of American millennials has found that many are planning to ditch health insurance due to the cost or confusion.

The non-profit Transamerica Center for Health Studies study reveals that the rate of uninsured millennials is continuing to drop – from 23 per cent in 2013 to 11 per cent in 2016 – but that 37 per cent of those that are currently uninsured have never been insured.

Women (60 per cent); the 18-27 age group (67 per cent); and the unemployed (68 per cent); are most likely to be uninsured.  Men are more likely to have private health insurance (79 per cent vs 64 per cent of women).

The main reason given by respondents for not having health insurance is being uninformed or unaware of how to apply. Thirty-five percent say they are not at all or not very informed about the health insurance options open to them.

Among those without insurance 47 per cent do not plan to apply for coverage in 2017 with affordability the main reason according to the report

Among those who are insured, there is still an issue regarding the ease of choosing from the options available; 39 per cent say it is difficult or very difficult. That rises to 54 per cent of currently uninsured millennials.