Analysts at many of the top ratings agencies recently said that due to major insurance losses from natural disasters over the past few years reinsurance renewal rates are expected to grow substantially higher in 2020.
Two years of record-setting hurricanes, floods and wildfires have taken their toll on the American populace and insurance industry alike. Analysts predict that 2020 rates will rise by an average of 5%.
However, it is important to remember that natural disaster season is not over year. Hurricane Dorian just ravaged the Bahama’s and it’s not unreasonable to assume that we’ll see another major storm before the year is up. Depending on the damage inflicted, we may see these rates go up even more than 5% over the next year.
Depending on your location, you might find that your rates are going to jump even more than that. California is a great example of this. The recent outbreak of wildfires in the state have S&P Global analysts estimating that rates will jump anywhere from 30% to 70%. Not only that, but these fires are predicted to only become more severe as time goes on due to global warming. That means that rates too, will only be increasing in the future.
According to the Insurance Journal, “Analysts at UBS estimated that the reinsurance industry is in an excess capital position of around $30 billion, but that an estimated $70 billion of natural catastrophe losses in 2019 could erode this excess capital.”
Natural disasters have always been something that the insurance industry has contended with. Unfortunately, global warming has created a situation where these disasters are more frequent and more severe than ever before. As a result, the insurance industry has to adapt. When more claims are filed, rates have to rise. There is no escaping that fact.
Knowing all of this, it might be a good time to shop around for a new policy with more affordable rates. To learn about your options, we encourage you to each out to TGS Insurance at www.tgsinsurance.com.