GAO examines catastrophe risk.(CAPITOL BEAT)

Claims, May, 2005

Natural catastrophes and terrorist attacks can place enormous financial demands on the insurance industry, resulting in higher premiums and substantially reduced coverage. Although insurers suffered losses of more than $20 billion in Florida from the 2004 hurricanes, steps such as implementing stronger building codes and stricter underwriting standards limited market disruptions.

Some insurers and reinsurers benefited from catastrophe bonds, which provided a diversified funding base. However, these bonds currently occupy a small niche in the global catastrophe reinsurance market, and many insurers view the costs associated with their issue as excessive. In addition, the industry does not consider such bonds feasible for terrorism risk. Authorizing insurers to...

Read the rest of this article with a Free Trial at HighBeam Research.

Premium Content Partnership | HighBeam Research provides an in-depth online archive library of reference works.