There have been large developments across the globe regarding insurance. With natural disasters reshaping insurance in the U.S. and China, as well as the evolution of insurance systems. This article will cover some of the latest insurance news around the globe to keep you updated and informed.
FEMA overhauls the national flood insurance program for climate change
Currently, the Federal Emergency Management Agency (FEMA) provides $1.3 trillion in coverage for more than 5 million policyholders in 23,500 communities across the US. Homeowners in FEMA-designated flood zones are required to purchase flood insurance, but others, who aren’t in FEMA-designated flood zones, do so voluntarily. Nearly one-third of NFIP policyholders are not mandated to carry it. On the 1st of October, climate change will be factored into the program by having it undergo a complete overhaul to ensure that the insurance pricing accurately reflects the unique flood risk each property has. The new model will consider the home’s replacement cost, whether the risk is rainfall, river or coastal flooding, and how close the property is to the potential flooding. FEMA will also factor in future catastrophic modeling from climate change, including sea level rise, drought and wildfires.
Mosaic Insurance and DXC technology launch innovative technology platform for specialty insurance
DXC has exceptional business-process expertise and technology, and Mosaic is a next-generation global specialty insurer. They have partnered to create a new insurance technology platform that will refine underwriting, simplify transactions and process claims and assess risks faster. Mosaic also offers to streamline end-to-end processing and to provide real-time access to data. The platform is powered by DXC’s technology services, including the DXC Assure for Commercial and Specialty, business process outsourcing, applications, analytics and engineering, cloud and security. The creation and launch of this platform is a huge step forward in the global insurance industry, as it combines the best-practices in insurance processing with state-of-the-art technology.
The travel landscape is being reshaped by the need for trip insurance due to the pandemic
According to Next Vacay, an airfare comparison site, there has been a 233% jump in users asking whether travel insurance coverage is worth the cost on Google over the past year. Destinations such as Turks and Caicos, Costa Rica, Mexico, Thailand, Israel and Mexico have recently become the most visited locations, according to Seven Corners, a travel insurer. This is because these destinations, except Mexico, require proof of Covid-specific coverage. Currently, 80% of travel medical plans that Seven Corners sells include a “specialized Covid-19 benefit.” It was found that people insuring trips with comprehensive coverage do it sooner and they buy international plans between three months and six days before departure.
China’s extreme hits insurance companies hard
The floods in Henan, China last month resulted in the loss of $1.7 billion. This heavily impacted insurance companies that provide property and casualty insurance. The floods in the region claimed over 300 lives, damaged over 1 million hectares of crops and destroyed over 35 000 houses across the province. These severe floods are hurting the profits of insurance companies. They also expose the shortfalls of the country’s natural disaster insurance system. Fitch Ratings said, “We expect insurance claims from the (Henan) flooding … to exceed CNY8 billion ($1.23 billion), or about 0.7% of China’s total non-life direct premiums written in 2020,”. According to a World Bank report, Chinese insurance companies play a weak role in China’s compensation for catastrophic loss systems. The insurance companies do not factor in the frequency of the disasters and use outdated models to sell insurance packages. Due to this, compensations for losses related to catastrophic events largely rely on government relief programs and public donations.
Credit Suisse sells European life and pensions business
Credit Suisse Life & Pensions AG is a Credit Suisse subsidiary. They focus on German and Italian insurance clients with offices based in Vaduz and Milan. Recently, Octium Group has agreed to acquire the subsidiary to strengthen its European footprint. The group Chairman, Jean-Francois Willems, believes that the acquisition is a step in their growth strategy and that it positions “Octium in the life insurance market across the entire European Economic Area.” The company has roughly EUR 4.5bn in assets under management. Their headquarters are based in Luxembourg, the insurance company “Octium Life DAC” is based in Ireland and the insurance intermediary “Octium International Insurance Agent AG” is based in Liechtenstein and Switzerland.
The takeaway
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Story by Giuliana Speranza
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