Catastrophe Bonds

Who pays for all these damages? People who live in hurricane prone areas obviously have insurance to fall back on when these disasters strike. It turns out that insurance companies also have insurance for instances like this. When insurance companies get stuck paying out large sums of money to a lot of people, they occasionally need a little help and

Hurricane, Earthquake, and other major disasters where high losses are involved. If one of these events were to occur, Jonssons puts a claim to Outsurance to cover their losses, however Outsurance can also be covered by another insurance agency, therefore when Jonssons claims and Outsurance pays out, Outsurance can then put a claim to their insurer and claim money back for their losses that now cover Jonssons. By doing this, insurance companies don’t only pay out money to the insured, but also gain money from the insured

The insurance industry’s performance is highly correlated with the state of the economy and specifically GDP growth. From the data outlined in this report, it is evident that the insurance industry flourishes alongside the economy where factors such as output, unemployment, and other variables are growing as well. Since the 2008 crisis, the Canadian economy has recovered quite well. One of the key concerns going forward is the current exchange rate of the Canadian dollar. Going forward, as the economy goes into a boom it will be crucial for the insurance industry to reach its potential.

Effective February 7, 2013, SeaBright Insurance Company (“Seabright”), a Seattle-based insurance company specializing in workers compensation, entered into run-off. In 2012, Enstar Group Limited (“Enstar”), a run-off specialist, purchased SeaBright. SeaBright continues to manage existing claims but no longer writes new or renewal business, which means that premium activity has slowed down. In 2015, a major change occurred when all of SeaBright’s net liabilities (i.e. loss reserves associated with its prior workers comp business) were shifted to an Enstar affiliate, Clarendon National Insurance Company, through a reinsurance agreement. Circumstances that led the company to run-off: SeaBright was placed into run-off driven by weakened underwriting performance associated with reserve strengthening actions for accident years 2007 through 2009, primarily related to increasing medical cost trends. Additionally, SeaBright was facing marketplace challenges associated with its geographic and coverage lines expansion. Seabright has had to deal with significant pressure from its workers comp book developing adversely year-over-year and having to liquidate investments to satisfy claims and expenses. The reinsurance contract with Clarendon did provide major relief but SeaBright still remains a going concern and without premiums coming in and asset base rapidly shrinking, its solvency status as an insurance company remains questionable. The key now is to track the level of credit risk

Various attempts have been made by Equitable Life to avoid insolvency, primarily at the expense of policyholders, but it was too late. The liability, worth £1.5 billion at the time it froze the value of all current with-profit policies, was going to swell even more if interest rate were to fall further, and nothing could possibly stop this from happening. There is still a lot of debate about the adequacy of regulation, and possible measures the Financial Services Authority (FSA) should have imposed on Equitable Life and other life insurers when it formally took over responsibility for the regulation of insurance in January 1999. There are also many fingers pointed at regulators who did not express any concern over the liabilities of Equitable Life in the early 1990s, when there was possibly still enough time to reverse the misfortune. One thing for sure: by failing to properly hedge its liabilities, Equitable robbed its policyholders of their peaceful retirement, and mistakes of such an enormous scale should never happen again. On 2/12/00, The Times published a

"Four years after Katrina, a mix of progress and inertia." USA Today, 28 Aug. 2009, p. 06A. Global Issues in Context, ezp.gvltec.edu:2048/login?url=http://link.galegroup.com/apps/doc/A206816088/GIC?u=gvltec_main&xid=a646acc3. Accessed 1 Nov. 2017.Summary: In this article it puts into perspective the risk of living near the coast. That is the reason insurance near the coast is so expensive. This is because in the event of a hurricane you could lose your house. The insurance companies will be more in the hole than the house owners because of their low premiums with a large return. The article also addresses how much more prepared we are now for a massive hurricane. One of the ways is we are upgrading our flood control systems, to prevent

Facing lawsuits and lost it can cause financial trouble. Whatever your stature in life, you need an umbrella insurance to cover you from legal impediments when you get sued by a client, a tenant or a third party. It is not a good idea to depend on one type of insurance policy if you are avoiding financial problems in the future. Be wise enough by having umbrella insurance quote Elgin. The purpose of his policy is:

The National Flood Insurance Program (NFIP) was established to provide government subsidized flood insurance and is administered by the Federal Emergency Management Agency (FEMA). Since Hurricane Katrina in 2005, the United States has experienced a series of major flood events that has required the NFIP to borrow from the U.S. Department of Treasury. The program is currently $24 billion in debt (Landers, 2014, p. 16). There are a number of areas where the NFIP has been reviewed and already reformed to help reduce costs like reducing administrative costs to manage the program. However, more significant reform is needed to be able to maintain and fund this program. A combination of changes will provide the best results. One direction is to increase the funding base for the program by increasing participation and increasing premiums. Another option is to reduce the cost of the program by shifting some burden to private insurers. In order to become and remain financially solvent, the National Flood Insurance Program needs to be reformed: the NFIP should remain a government administered program with a reform focused on increasing program participation through education and enforcement, and adjusting premiums to reflect actual risks; the NFIP should incorporate privatization through a public-private partnership with insurance companies to provide catastrophic insurance coverage.

During the year of 2011, a disastrous and devastating EF5 tornado hit Joplin, Missouri. Overall, there was destruction to more than 7,000 structural buildings and home. The EF5 tornado killed about 162 individuals. The projected destruction to buildings that were covered under insurance goes beyond one billion dollars, which causes it to be the greatest insurance disbursement within Missouri history. Instantaneous expenses would consist of deaths of individual and the loss of property or destruction. Household incomes are capable of becoming strained and government funding could be unavailable with the efforts of rebuilding and renovation. Once a natural disaster strikes the replacement assets could perhaps be more productive compared to original capital, which could result in a boosted economic development.

Such insurance companies are the heavyweights of the industry that would tend to insure anything of great value. These kind of insurance companies insure international shipping, airline

During the 1960’s the United States suffered from several natural disasters, including hurricanes and earthquakes, which caused hundreds of millions of dollars in damage. (Bullock & Coppola, 2014) The normal response to these types of disasters was to pass impromptu legislation for funds. After Hurricane Betsy in 1965, the idea of disaster insurance that could help with future disasters and also limit the reliance on government assistance was discussed. Flood insurance was largely unavailable on normal homeowner policies and if it was available, it was too costly (Bullock & Coppola, 2014). According to Fier, Gatzlaff, and Pooser (2014), “private insurers did not view flood as an insurable peril” (p.118). The main reasons for this being

The National Flood Insurance Program (NFIP) is over $24 billion in debt following disasters such as Hurricanes Sandy and Katrina.1 The program was created in the 1960s because insurers were leaving the flood insurance market due to outrageous risks. Its purpose is to subsidize the policies of property owners in flood risk areas and, for some, is the only way to get affordable flood coverage. Today, about 20% of the 5.5 million flood policies in effect are subsidized by the NFIP. The other 80% pays premiums based on actual risk, which is the point of insurance to begin with.2 What began as a successful solution to unaffordable rates has become an economic disaster, leaving taxpayers to pick up the tab.

Above research shows the different responses of organizations and government. The NSW emergency service centre had about 300 calls each day to serve for the citizens. Which helps to solve the power problem of many houses. Because most people don’t usually buy insurance for their family and themselves. The New South Wales Emergency Service Minister had said that people who live near the coast still don’t buy insurance for their house and themselves. The storms and floodwaters had left four people dead and three people missing across NSW, ACT, and Tasmania, including a man last seen struggling in wild conditions at Bondi Beach. This hurt the economic so much that every time it cost more than $ 5 million for repairmen. It will be a good idea for people that lived near the coastal area to buy insurance for less costs and damages.

So, you can see that there are a lot of reasons to buy the hurricane insurance. Analyzing Joe Martinez’s earnings (175 000$ annually), we can say that the total premium for $ 13 000 is quite large amount (7% of annual earnings). If we will compare this amount with his monthly earnings ($ 14 583) it is 89%. But from another point of view, his eventual losses from hurricane’s devastation maximum can be $648 390, in case of 5th and 4th categories of hurricanes. We would like to give an advice to Joe Martinez, to buy standard and wind coverage insurance for $13 000, and he should think about

Insurance is a federal subject in India. It is a subject matter of solicitation. The legislations that deal with insurance business in India are Insurance Act, 1938 and Insurance Regulatory & Development Authority Act (IRDA), 1999. Insurance is defined as is a form of risk management primarily used to hedge against unforeseen risks of contingent losses. Another approach to Insurance is as the equitable transfer of risks, or the possibility of occurrence of losses, from one entity to another, by the method of diversification in exchange for a premium. An Insurer is a company designing, promoting and selling insurance products and services amongst the public. An insured or policyholder is the person or entity purchasing these products and services.