We have all been struck dumb by the loss of flight MH 370 and the 239 passengers on board. As if the loss of life and property weren’t enough to produce extreme emotional reactions in us all, those of us in the insurance industry are aghast at what this might cost in terms of our already overburdened insurance markets.
Hurricanes, floods, windstorms, harsh weather all contribute statistically to the recent rise in insurance costs, but current events, such as this one, also affect our industry. This is the second major Asian airline to be involved in an incident in less than a year. An Asian flight July of 2013 was landing in a California airport when it was involved in a runway accident which killed three people.
These occurrences, together with the ever present threat of terrorism, 9/11, the Boston Marathon Bombing and other events throughout the world certainly make underwriters sit up and take notice when considering their exposure to risk when underwriting an event.
Insurance information sources indicate that Allianz was the lead insurer for the missing Malaysian flight. Although they are only one of many, including reinsurance companies, rumor has it that they are looking at a payment of approximately $100 million for the plane and its passengers under aviation policies in effect at the time of the loss.
Occurrences such as these, including the missing aircraft, make a strong argument for the continuation of Terrorism coverage in the United States.
So, the next time you get an increase on your renewal, keep in mind that we are all affected by what goes on here as well as abroad.
– Karen Skoler, CPCU