Months Of Mass Destruction May Lead To Higher Insurance Rates
May turned out to be a mega-expensive month in terms of insurance losses. A busy week of severe thunderstorms and tornadoes across much of the US generated between $4 billion and $7 billion in insured losses, according to AIR Worldwide. AIR Worldwide is a catastrophe modeling company.
The rough month of May follows several months of unheard of losses that includes floods and cyclones in Australia, earthquakes in New Zealand and Japan, unrest in the Middle East, and of course, sky high tornado damage in the US. The unprecedented pattern of damage has left the insurance industry with little option but to raise rates.
According to the Chicago Tribune, experts say that 2011 losses for reinsurers are already more than double their full-year forecast. Two major tornado episodes ranked among the costliest in history. The insurance industry may be responding with higher prices. They’re also preparing for hurricane season which just started and could lead to even more destruction. The US did not have a major hurricane hit land the past two years but experts are predicting an active 2011 hurricane season.
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