Public policy papers Natural Hazards and the Canadian Insurance Industry Mark Baker Administrative Services Supervisor State Farm Insurance Companies December 2002 ICLR Research Paper Series – No. 25
Abstract
Natural hazards have always been a major concern for the insurance industry. They are the primary cause of disasters that produce both human suffering and economic hardship. Both Canadian and international insurers recognize that they are vulnerable to these catastrophic events. Therefore, it is not surprising that the insurance industry are leaders in the study of natural hazards and their effects both on insurers and their clients.
Catastrophes have the possibility to have a significant adverse impact on a company or the insurance industry as a whole. Reinsurance was developed largely to protect the industry in total and deal with natural hazards. Non-catastrophic losses from natural hazards also produce large numbers of claims and are therefore of interest as they contribute to disaster loss payments by insurers.