Superstorm Sandy may not have hardened the insurance market, but it has changed the way underwriters view the Northeast, a view that catastrophe models will reflect going forward.
According to NAPCO’s Spring 2013 State of the Market Report, underwriters and CAT modelers will now treat the Northeast more like the Southeast when it comes to property pricing and the availability of flood insurance.
The wholesale brokerage’s report also says that underwriters will be using enhanced technology that can provide more precise modeling to help underwrite in this region.
“Everything else – hurricanes, earthquakes, etc. – underwriters have a good handle on. But we have to reexamine how we price and treat this area,” says Dave Pagoumian, president of Iselin, N.J.-based NAPCO. Pagoumian says while Sandy caused some earnings losses for the major carriers in the region, it wasn’t significant enough to overtly disrupt the market.
The most volatile areas of the property marketplace now are the habitational segment and flood coverage. Those segments are struggling with how to provide and price coverage adequately, according to NAPCO.
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