Positive outlook for commercial lines says Wells Fargo
Rates may be lower and investments may have lower yields but commercial lines insurance should see positive underwriting gains in 2016. The latest market outlook from Wells Fargo Insurance points to favorable losses and lack of multiple catastrophic property losses as factors in the optimistic outlook.
The report forecasts that with GDP growth expected to slow in 2016, there should be higher revenues, payrolls, and property values upon which insurance premiums are based. This will also help to offset some of the premium lost by insurers through year-over- year rate reductions. Investment returns should see some improvement as interest rates rise.
The insurer also expects greater volume and depth of data analysis by insurance companies and brokers in order to more accurate calculate risk and premiums. Mergers and acquisitions in the sector are also predicted to continue to be prevalent in the insurance sector.
Climate change dominating disaster trends
Last year was the hottest on record and has confirmed that weather and climate-related disasters now dominate disaster trends according to analysis by the Centre for Research on the Epidemiology of Disasters in Belgium.
The data shows that there were 32 major droughts recorded in 2015 compared to an annual average of 15 over the previous decade. Droughts affected 50.5 million people, well above the ten-year average of 35.4 million.
CRED Director, Dr. Debarati Guha-Sapir, said: “At 22,773 deaths for 2015, overall disaster mortality was considerably down on the ten-year average of 76,424 deaths. It does seem that early warnings are having an impact in the case of storms. Further investment in this area is warranted by these numbers.
Dr Guha-Sapir said that deaths from heatwaves increased though and were under-estimated and better evaluation of their impact need to be assessed.
The head of the UN Office for Disaster Risk Reduction, Robert Glasser, added: “We have come through the hottest year on record. 98.6 million people were affected by disasters last year and climate often aided by a strong El Niño was a factor in 92 per cent of those events. Reducing greenhouse gases and adapting to climate change is vital for countries seeking to reduce disaster risk now and in the future.”
Former security services chief joins Marsh
Marsh has appointed a former head of one of the main security and intelligence services in the UK to head it’s a senior advisor on cyber risk. Sir Iain Lobban was a director of the Government Communications Headquarters, known as GCHQ, and will provide strategic advice via Marsh’s Cyber Center of Excellence. While at GCHQ he developed the UK’s cyber defense capability and operations, as well as driving initiatives in support of UK military campaigns, counter terrorism, and the prevention and detection of serious crime.
