Thursday, 6 November 2014: 5:00 PM
University (Madison Concourse Hotel)
Following 2011, a year that slammed the insurance industry with $26 billion in annual losses from tornado, hail, and straight-line wind damages, heightened awareness placed a spotlight on the increasing cost of severe weather disasters. Searching for answers, some industry focus has centered on the question of frequency. While the overall number of reported tornadoes has increased over time, recent publications do not support a hypothesis of increased frequency. The identification of key contributors to recent trends in insured losses is of paramount concern and is an active area of industry and academic research. In an effort to quantify the increasing risk of severe storms to the insurance industry, this paper addresses changes in claiming practices, building code enforcement, storm-chaser activity, along with other trending factors. Driven by the development of catastrophe risk modeling for severe storms, research presented herein focuses on understanding the contributions of these trends on insured losses, identifying future consequences for the insurance industry, and addressing the need for continuing in-depth research by the academic community.
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