In this episode of The Connected Podcast, we delve into significant advancements and pressing concerns in the insurance ecosystem, particularly revolving around hurricane tracking, geocoding, and aerial and exposure modeling. As Hurricane Helene looms, tools enabling immediate financial impact assessments post-storm are invaluable. Gallagher Re’s recent report predicts Helene's insured losses could range between $3 to $6 billion, with federally-funded insurance programs potentially adding another $1 billion based on storm surge severity.
Anna Neely from Howden Re emphasizes the unpredictability of Helene's path, drawing parallels to past hurricanes like Idalia, Michael, and Irma, which had varying financial repercussions based on their trajectories. Meanwhile, CoreLogic Inc. estimates substantial risk to approximately 25,000 residential properties, valued at $5.6 billion, from storm surges if Helene lands as a Category 3 hurricane.
Insurers, such as Citizens Property Insurance Corp., Heritage Property & Casualty, and Security First, are advising customers on storm preparation and claim processes. Post-hurricane challenges often involve determining damage causes, especially considering property insurance typically excludes flood damage, leading to delays in claim payouts and prolonged FEMA reviews.
Addressing this, Citizens’ board member Charlie Lydecker proposed enhancing communication with FEMA to expedite claims processing. Additionally, troubling statistics from Weiss Ratings reveal that major U.S. property insurers denied 40% to 70% of homeowner claims in 2023. This trend, linked to climate change costs and financial strategies favoring shareholders over reserve maintenance, has starkly affected homeowners.
The episode underscores the critical intersection of natural disasters, insurance practices, and the escalating impacts of climate change on both insurers and policyholders.
In another segment, we dive into the latest news and events shaping the insurance ecosystem, focusing on the increasing concern over cyber threats. The Travelers Companies has released its 2024 Travelers Risk Index, revealing that cyber threats continue to top the list of worries for U.S. business leaders. This annual survey highlights that 62% of respondents prioritize cyber risks, marking the fourth time in six years that cyber concerns have taken the lead.
Tim Francis, the cyber lead at Travelers, comments on the business community's heightened awareness of the impact of cyberattacks. Despite this growing concern, nearly 30% of surveyed companies still lack cyber insurance, though the adoption rate has increased to 65% from 60% last year.
Shifting focus, the episode also explores a Nationwide survey that shows small business owners in the U.S. are particularly anxious about generative AI scams, such as deepfake and impersonation attacks. Despite the rising threat, less than half of these businesses have cyber insurance, although there's a recognized need for stronger protection.
Nathan Lentz from Nationwide emphasizes the critical need for small businesses to bolster their cyber defenses and secure appropriate insurance. In Canada, similar concerns are echoed in a survey by the Insurance Bureau of Canada, which indicates growing apprehension about AI-powered cyber risks. Despite the escalating danger, investm
