Insurance Executives Present a Sobering View of Extreme Events

SCHAUMBURG, Illinois, Oct. 28 -- Zurich Insurance, a property-casualty insurance company, issued the following news release:

Devastating hurricanes, deadly wildfires and crippling cyber attacks comprise the "new normal," said panelists at a recent insurance conference.

Executives from Zurich North America, Nationwide Mutual Insurance Company and AXA XL took the stage at the Verisk Velocity conference to lead a discussion about the challenges of responding to the evolving and expanding risks of natural and man-made hazards.

The theme of the panel, "The New Normal: Mitigating and Underwriting Extreme Events," asked the speakers and audience members to acknowledge that record-breaking hurricanes, fast-moving wildfires and frequent and costly cyber attacks are quickly becoming the new realities of today's world. The conference was held at the Hyatt Regency in Jersey City, New Jersey.

Liz Kramer, Zurich North America's Head of Technical Underwriting, Alternative Markets, said the insurance industry can help address these extreme events in three ways: Focus on mitigating and underwriting the risks -- not just providing risk-transfer solutions; study past events to learn lessons that can help our customers and communities; and support long-term recovery through sustainability initiatives.

The panelists noted the explosion of urban development in areas prone to wildfires and the impact that climate change has had on the frequency and severity of wildfires in the West. Kramer added that Zurich recently conducted a post-event review of the 2016 Fort McMurray wildfire in the Canadian province of Alberta.

An audience member asked if the insurance industry is obligated to provide insurance for properties in high-risk areas, such as flood zones near the coast. The panelists agreed that continued development along the Atlantic and Gulf coasts presents challenges, but also noted that flooding can happen anywhere, even outside of areas identified on flood maps.

On the topic of cyber, the panelists applauded the industry's approach of vulnerability assessment before risk transfer."We're all much more dependent on data, we're more interconnected and we're relying on it more," Kramer said. "That complexity of our dependency is going to make the exposure increase."

She noted that a recent survey of U.S. business leaders identified cyber attacks as the top risk for doing business.

The discussion concluded with each panelist sharing their views on a challenging casualty market, led by lawsuits related to concussions, opioid abuse, the #MeToo movement and extended statutes of limitations.

"I think it's actually a fascinating time to be a casualty underwriter," Kramer said. "It's not dull -- there's a lot going on."