If you think about risk management, one of the areas which comes up is insurance and insurance companies. We hear that storms are becoming more severe than what they used to be, and a cynic would say that means higher rates by insurance companies. It could be true,

In an article by Federica Urso of Reuters, the global insurance giant Aon noted natural disasters caused global losses of $313 billion, less than half was insured.

Losses from natural catastrophes covered by the insurance companies amounted to $132 billion, 57% above the 21st century average, leaving a global protection gap of 58%.

The gap was one of the lowest on record because many of the costliness disasters occurred in countries with mature insurance markets such as US and Europe. The biggest contributor was Hurricane Ian which caused insured damages in a range $50 – 55 billion from total economic losses of $95 billion. Ian is the second most expensive natural disaster the insurance sector has faced.

In Australia, there was $4 billion in insured losses linked to floods.

In Europe, Aon believes 31,300 people lost their lives with 2/3s linked to severe heatwaves.

Linking to dividend paying stocks, a number of years ago, once read a report from a farm-based insurance company saying last year we had fewer barn fires, which means the company had a surplus. In the insurance world, people buy insurance, hoping they will never use it and if they do not, the insurance company makes money. If your insurance company does not practice and push preventive measures, then it is time to find a new insurance company to invest in.

There are more questions than answers, till the next time – to raising questions.