Guy Carpenter & Company released Part II of the two-part Ten-Year Retrospective of the 2004 and 2005 Atlantic Hurricane Seasons. Part II focuses on the 2005 hurricane season and the cumulative impacts of both the 2004 and 2005 seasons on the rating agencies. "The 2005 Atlantic 2004 & 2005 Seasons: Impact to the (Re)insurance Industry The intense damage caused by Impact to Catastrophe Models Major updates to both internal and vendor U.S. catastrophe models were made as a result of lessons learned during the 2004 and 2005 seasons as in many cases, models significantly underestimated the actual experienced claim losses. This disconnect also highlighted deficiencies in the collecting and entering of exposure data into the catastrophe models. As a result, many companies instituted initiatives to review and augment the accuracy and completeness of their catastrophe modeling data. Florida Hurricane Catastrophe Fund Changes (FHCF) As a result of additional legislative requirements for the FHCF in 2006, combined with significant hurricane activity in 2004 and 2005, the FHCF experienced a funding shortfall for the first time in its history. The unprecedented loss activity stemming from these seasons plus the compounding impacts of other industry changes caused insurance premiums to increase in Florida. Click here to read the full report>> Link to Part I>> Click here to register to receive e-mail updates>>
Note: PCS loss estimates used with permission: http://my.verisk.com/14q3catreview?source=gc