HomeMy WebLinkAboutMMIA Risk Management Bulletin (2)MMIA
Please distribute to all appropriate personnel and post in a conspicuous place.
DATE:
TO:
FROM:
RE:
November 1, 2005 R.M. Bulletin #2-06
All Members of MMIA Property Insurance Program
John D. Craig - Property Program Manager
Montana Municipal Insurance Authority
Worldwide Disasters May Impact Next Year's Insurance
Rates
A Tsunami in Indonesia; hurricanes in Louisiana and Flodda; an earthquake in Pakistan and what do they all
have in common? Catastrephes of this magnitude result in large insurence claims that pull huge amounts of
money away frem worldwide insurance reserves. When so many events happen in a single year, the insurence
markets are sent spinning. The common thread here is that these events will undoubtedly send all preperty
insurance rates spireling next year.
How much is anyone's guess at this point but company underwdtere have suggested 25% may not be out of
reason. This is an industry wide response to unforeseen and unanticipated Iosses. To say wa're facing a
hardening market is an obvious understatement, but the magnitude of the preblem may not be known for
several years. It could take that long to sort out the full extant of the damage, claims, and insurance liabilities.
MMIA preperty program members have enjoyed a softening insurance market for the last couple of years.
Following the 911 terredst cdses, new reserves ware found in Bahamas investment funding which helped to
soften the industry impact. But the sheer magnitude of these resent events gives little hope for quick solutions
and a return to the soft markets we have enjoyed.
We will continue to keep you informed as these events unfold. For now, please be mindful in your budgeting
process to allow for insurance rates that could be substantially increased.
In the mean time there are ways to keep premium increases in check by shadng dsk threugh agreed valuation,
increased deductible, and other dsk management elements to reduce loss. MMIA can help you set up a risk
assessment process to insure informed decision making.
If you have questions or would like to discuss your coverage and coverage options please call. We want to
help you deal preactively not reactively! Phone (800) 635-3089
This newsletter is published as a service to our membem. The articles are not a substitute for the Memorandum of Liability coverage or other coverage
documents. All covera~le doterminat~ons are made on a case-by-case basis, and can only be viewed on the unique facts of the claim presented.