This PowerPoint report explores in depth natural and manmade catastrophes in 2015 and looks at future underinsured risks. Among the findings: the number of natural catastrophe events continues to trend up. The top insured loss in 2015, however, was a man-made event—the Tianjin, China, port explosion that killed 173 people and is projected to cost $2.5 to $3.5 billion. Global losses totalled $92 billion in 2015 with nearly 60 percent uninsured. Total (economic) losses outpaced insured losses, with the protection gap varying by peril and by region. The 7.8 earthquake in Nepal resulted in the deadliest and costliest economic loss in 2015 with 9000 victims and economic losses of $6 billion with only $160 million insured. Insurance industry financials are often driven by catastrophe (CAT) loss activity, and while past years have been quiet, this will change. 2013-2014 and 2015 experienced below average CAT activity after very high CAT losses in 2011-2012. Winter storm losses were far above average in 2014 and 2015. The report then turns to the issue of underinsurance, and names four different categories: Entirely Uninsured; Insured, but Certain Perils Excluded; Insured, but Policy Terms Restrictive; Insured, but Undervalued. Consumer awareness is an issue, but ongoing, and a case study on flood insurance is presented. The advance of technology creates new risks and gaps that require new solutions, such as for the Internet of Things, and cybersecurity. However, while cyberrisk is a rapidly emerging exposure for large and small businesses in every industry, insurers are finding ways to close the gaps. Cyber insurance premiums written could more than triple to $7.5 billion by 2020.
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