From the Editor's Desk
The coronavirus pandemic will rank as one of the biggest catastrophes ever for the insurance industry. Hurricanes, floods and wildfires, however, remain threats that will demand attention.
- Patricia Vowinkel
- June 2020
The pandemic had caused more than 80,000 deaths in the United States as of early May and more than 280,000 worldwide. While the total cost for the U.S. insurance industry may still be hard to quantify, there's no question that the impact has been sweeping and devastating, putting it in a league of its own.
It's a catastrophe that has crossed geographic boundaries, hitting multiple countries simultaneously. It has forced many small businesses to close and has put tens of millions of people out of work due to stay-at-home orders and social distancing measures.
This has been unlike any other catastrophe.
The United States now faces the challenge of attempting to reopen the economy without adding new fuel to the pandemic fire.
With the arrival of hurricane season on June 1, the industry faces a familiar but potentially costly risk while still in the midst of this historic pandemic storm. Hurricanes have been one of the biggest risks for the insurance industry. Hurricane Katrina caused nearly $53 billion in insured losses in 2019 dollars, Hurricane Harvey about $20 billion and Hurricane Sandy about $21 billion.
In the June issue, Best's Review focuses on the theme of catastrophes.
“The Covid Catastrophe” looks at the pandemic, what makes it similar to other catastrophes and what sets it apart. The article addresses industry stress tests run by AM Best and looks at steps insurers took years ago that helped them prepare for this event and how the industry may change going forward.
“[Still] Open for Business” looks at some of the challenges facing agents and brokers who sell life, property/casualty, health, employee benefit plans and retirement products. Many are small businesses that normally would meet with customers face-to-face and many have faced government-mandated closings and restrictions as the country moved into lockdown mode.
In “Serving His Country,” Best's Review spoke with John F. King, Georgia's top insurance regulator and a major general in the National Guard. King had been on the front lines in the pandemic earlier this year, helping to build makeshift medical facilities and increase hospital capacity for patients in New Jersey.
While the virus now takes up much of the nation's attention, other natural disasters such as hurricanes, floods and wildfires will demand industry attention as well.
“Weather Alert” looks at three states that have been hard hit by these disasters in recent years—Florida, Texas and California—and examines some of the steps that have been taken in those states to address the issues.
The June issue also includes an article by Dr. Richard L. Sandor, the Aaron Director Lecturer in Law and Economics at the University of Chicago Law School and an innovator widely known as the father of financial futures. His article “On the Way Out” examines the phasing out of the London Interbank Offered Rate and some of the alternatives available to insurers.