From Convective Storms to Flood: The Growing Impact of Secondary Insurance Perils
2023 was a "quiet record year" with $93 billion in total insurance losses related to natural catastrophes, despite no major headline storms.
The primary question clients ask is about the insurance company's view of risk, particularly because there is no standard approach to pricing, capacity, or terms and conditions for non-peak perils.
Customers are adjusting their deductibles and terms and conditions, either willingly or out of necessity, to purchase insurance due to inadequate coverage for non-peak perils.
Non-peak or secondary catastrophe perils are characterized by high event frequency and localized occurrences that don't typically cause large single events, unlike peak perils such as hurricanes and earthquakes.
Underwriting is no longer as simple as relying on tools or models to generate an adequate number.