Weiye Loh's Library tagged Insurance →  View Popular, Search in Google

• Swiss Reinsurance and the Reinsurance Association of America teamed up yesterday with a few US Senators to call for the US government to adopt policies to protect their industry from extreme events resulting from climate change. They also ite the NOAA billionz analysis and explain via press release ""From our industry's perspective, the footprints of climate change are around us and the trend of increasing damage to property and threat to lives is clear," said Franklin Nutter, president of the Reinsurance Association of America."
 

 Reality Check: The ability of the reinsurance industry to accurately reflect the state of the science of disasters and climate change has long been questionable. The industry is currently awash in money, a condition that Guy Carpenpter characterized just a few months ago as "the reinsurance sector remains adequately capitalized with a significant excess capital position" (PDF). In such a context, when reinsurers ask the government to take on some of their risks justified by "climate change," you should hold tight to your wallet. Conflicted.

Reinsurers, however, have no incentive to mislead. Their choices on risk, with billions of dollars at stake, are necessarily aligned with the pursuit of truth. If a reinsurer is more scared of a risk than it should be, its shareholders will punish it. If it is less scared than it should be, the world, eventually, will break it. There are rewards for politicians, corporations, think tanks, and activists who dissemble about risk. There are none for reinsurers.

Reinsurers, however, have no incentive to mislead. Their choices on risk, with billions of dollars at stake, are necessarily aligned with the pursuit of truth. If a reinsurer is more scared of a risk than it should be, its shareholders will punish it. If it is less scared than it should be, the world, eventually, will break it. There are rewards for politicians, corporations, think tanks, and activists who dissemble about risk. There are none for reinsurers.

Before you scream "oh no, socialism!!!" stop and consider what you mean by that. How do socialist systems pay for health care? Taxes are collected from businesses and citizens, and a portion of those taxes go to cover the health care costs of everyone in the plan - in other words, everyone in the country.

How do health insurance systems pay for health care? Premiums are collected from businesses and employees, and a portion of those premiums go to cover the health care costs of everyone in the plan.

The difference between the two? Socialized care costs less (because it has a much larger pool of people to draw from), covers everyone at all times, and prevents people from purposefully committing crimes to get treated. Insurance systems ARE socialized systems, except they don't cover everyone and allow a corporation - and entity that neither receives nor provides the medical treatment - to skim a profit off the top.

Overall, pressure on prices in most lines of business and regions is persisting. Munich Re therefore consistently withdrew from under-rated business. It nevertheless proved possible to expand accounts with individual major clients, so that the business volume grew slightly on balance, despite the difficult environment. Munich Re owes this profitable growth especially to its ability to swiftly offer complex, tailor-made reinsurance solutions to its clients. Besides this, the many large losses resulting from natural hazards and also from man-made events, had a stabilising influence on the lines of business and regions affected. Thus, prices increased markedly for natural catastrophe covers in Australia/New Zealand (Oceania) and in offshore energy business. There were no major changes in conditions in this renewal season. The overall outcome of the reinsurance treaty renewals at 1 January 2011 was again very satisfactory for Munich Re.

Insurance and reinsurance prices have been falling across most business lines for two years, reflecting intense competition between well-capitalised insurers and a comparative dearth of major catastrophe-induced losses.

Mr. Potter was the head of corporate communications at two major insurers, first at Humana and then at Cigna.

 Now Mr. Potter has written a fascinating book that details the methods he and his colleagues used to manipulate public opinion

In the end, however, Nataline’s death proved to be the final straw for Mr. Potter. “It became clearer to me than ever that I was part of an industry that would do whatever it took to perpetuate its extraordinarily profitable existence,” he writes. “I had sold my soul.”

 He left corporate public relations for good less than six months after her death.