Declarations

Heavy Rain

“It was fast and furious, so that’s why people got slammed. The water came gushing. It’s the worst (flood) I’ve seen.”

—Patricia Murphy, mayor of New Milford, Connecticut, where state officials had to haul a temporary bridge to install a flooded road earlier this month. Across much of the Northeast, heavy rains and warmer temperatures caused significant flooding and property damage.

Earthquake Resonance

“When the damage is not in your backyard, the tendency is not to think about insurance. But in this small world of ours, businesses of all sizes are affected by events far away. When those events cause a loss of income, managers should train themselves to think ‘insurance’ and develop a reflex to give notice to any insurance company that may potentially provide coverage.”

—Finley Harckham, a lawyer with Anderson Kill & Olick’s Insurance Recovery Practice in New York, commenting on the domestic insurance impact of the Japanese earthquake and tsunami, which killed at least 2,000 people and caused extensive damage in that country earlier this month. Insurance experts are advising companies with operations or suppliers impacted by the quake that they could potentially file claims under their business interruption coverage.

Premiums Increasing

“We’re going to see continuance of deterioration of underwriting losses, fewer reserves released, continuance of low investment yields. And so, each of those three things are pointing towards a hardening market and a continuance of that.”

—Jon Wright, SNL Financial’s director of insurance, on a new report by the Virginia-based group which predicts a hardening of insurance premiums in the coming year. SNL says U.S. premiums in the fourth quarter grew at their fastest rate since 2006 in response to underwriting losses, unfavorable reserve development and an improving economy — all trends that will likely mean higher premiums, particularly in personal auto and homeowners insurance, Wright said.