Secondary peril events are becoming more impactful and generating an increasingly larger amount of insured losses, affecting the bottom lines of personal and commercial lines property underwriters, according to an AM Best commentary.
A new Best’s Commentary, titled, “Secondary Perils Increasingly Responsible for Largest
According to the commentary, early estimates of 2021 losses from natural catastrophes are higher than
“The fact remains that secondary perils have not been modeled to the same extent as primary perils, although this modeling is evolving, and insurers are taking actions to address exposures to these risks through underwriting and pricing actions,” said
In the near term, insurers could see higher insured losses from inflation that increases the value of exposed property, as well as continued demographic shifts to higher-risk geographies and aging building stock. The impact of these trends also is reflected in reinsurance pricing on primary companies, especially in loss-affected areas.
To access the full copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=316561.
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Source: AM Best