Verisk Insurance Solutions’ Head of PCS, Tom Johansmeyer, spoke with Reinsurance News about the types of risks that cedents should be keeping front of mind for 2023.
“Cat is obviously top of the list, with a particular focus on Florida. That’s because, much as armies prepare to fight their last war rather than the next one, the reinsurance and ILS community hedges the loss it just experienced,” he said.
“Looking forward, I wouldn’t lose sight of the rise of what were once secondary perils. Severe convective storms and wildfire have shown they can have profound impact on the global re/insurance industry.”
Johansmeyer addressed both the recent hailstorm in France and the flooding in Germany and Belgium, and how they each require not just a “specific focus”, but also an effort at thinking “more broadly” about what could come next.
Additionally, Johansmeyer touched upon how we cannot ignore political violence following on from the conflict in Ukraine and aviation losses in Russia that have taken place throughout 2022.
He noted that PCS estimates that the combined losses from those events could potentially reach up to $30 billion. However, he stated that figure is based on limited information as well as a lot of assumptions and projection too.
He added: “2019 and 2020 had political violence loss events of nearly $3 billion each, with 2021 a little over $3 billion. There have been several events of above $100 million during that period, as well, including the Almaty, Kazakhstan riots of nearly a year ago. A riot exceeding an industry loss of $5 billion no longer seems unrealistic.
“Armed conflict could lead to hurricane-sized losses elsewhere in the world (not just Ukraine). Climate risks and their impacts on food and water security, human migration, energy security, and other factors could have unexpectedly large re/insurance industry effects.”
Furthermore, Johansmeyer addressed the ongoing protests in Moldova and explained how the problem’s that the country is currently facing are continuing to grow. He noted that the role of information conflict in the country’s unrest, which is linked to food, energy, and economic security is highly noteworthy because it could be portable.
He warns that the confluence of information operations, energy insecurity, and inflation in Western Europe in the coming months could lead to “much greater civil unrest risk.”