Ballooning losses, 101.1 degrees and the perilous property market

Earnings for the major insurers are pouring in and there's a clear theme developing: Cat losses. Big, expensive, unexpected losses. Travelers ?posted a $1.5-billion cat hit, Allstate ?reported?flagged $1 billion in June losses and The Hanover Insurance Group warned of a $262-million cat impact.?"We had six events surpass the $100-million mark in Q2, the most ever for a single quarter since [… at least] 2013," Travelers CFO Dan Frey said in a conference call.

Munich Re posted losses from natural disasters of $110 billion for the first half of 2023, with insured loss reaching $43 billion. “The effects of climate change are having a stronger and stronger impact on our lives. The first half of 2023 was characterized by record temperatures in many regions of the world, very high water temperatures in various ocean basins, droughts in parts of Europe, and severe wildfires in northeastern Canada,” Munich Re's Ernst Rauch said.

Speaking of record water temperatures... umm, 101.1 degrees off the coast of Florida? If that doesn't set off some serious alarm bells, what would it take?

To Friederike Otto of the?Grantham Research Institute on Climate Change & the Environment, no more proof of a world in dire need of global cooperation is needed. Now or never. “As long as we keep burning fossil fuels we will see more and more of these extremes,” she said. “I don’t think there’s any stronger evidence that any science has ever presented for a scientific question.”

Anyway, back to business. While much of the insurance industry is grappling with very difficult economic conditions, #workerscomp just keeps outperforming, having posted six straight years of sub-90 combined ratios and nine straight of underwriting gains, according to the?Insurance Information Institute.

On the other end of the spectrum, Neil Alldredge of the?National Association of Mutual Insurance Companies (NAMIC)?told?The Wall Street Journal?that we're looking at "probably the worst period for auto insurers" in a least 30 years.

As for property, Risk & Insurance uses this infographic to break down nine pressing issues the segment will have to navigate in the coming months.

So how hard is the market right now? It just surpassed the one that cost $15 billion-plus in insured losses following Hurricane Andrew back in 1992, according to Juan Andrade, president and CEO of Bermuda-based reinsurer?Everest.

Finally, a shoutout to John J. Hayes and our fleet leasing program, which got some love from the National Vehicle Leasing Association (NVLA) .