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The global property protection gap in natural catastrophe risk has widened steadily over the past 40 years. In historical terms, we find that most underinsurance of extreme events is for climate-related events such as flood and windstorm, but in expected terms, earthquakes comprise the largest share of underinsurance. Using a framework to define the protection gap in historical and expected terms, this paper breaks down the gap by geography and risk type and presents an empirical analysis of the key drivers of the gap. First, uninsured expected Cat losses are estimated using models that combine geophysical vulnerability maps, economic exposure data and insurance market information. Second, each country’s expected (or optimal) property insurance penetration is modelled and compared to actual penetration to derive a measure of property underinsurance. Third, we explore the factors that affect property insurance demand, applying regression analysis to an unbalanced panel data set that includes 53 countries observed over a 15-year period. Several significant economic, financial market, sociodemographic, cultural and institutional variables are identified. The results lead to a taxonomy of the root causes of underinsurance and a set of proposed measures to narrow the protection gap.

There's a huge opportunity for the insurance sector to close a combined record protection gap of $1.2 trillion in 2018 premium equivalent terms.

On a global scale, natural catastrophes and man-made disasters set records in 2005. Canada did not escape this trend. Tornadoes and floods from rising rivers in Canada resulted in $342 million in insured losses last year. Swiss Re estimates total natural catastrophe economic losses in 2005 at over US$230 billion. Of the total damage, insurance covered just one-third of the losses. In addition, man-made disasters financially impacted property insurers in the amount of approximately $5 billion. The extent of flood damage in 2005 raises some noteworthy insurance issues in both Canada and the US. Up to now, private demand for flood cover has been weak. Higher uncertainties regarding property risk will require more capital for each premium dollar, particularly for smaller and undiversified insurers and reinsurers. Paradoxically, a year of great challenges has demonstrated the strength of the insurance industry.

The reinsurance industry has been through some important changes in the last decade, many of which were initiated by market dislocations that resulted from extraordinary losses, in particular the US liability crisis in the mid-1980s and an accumulation of natural catastrophe losses between 1989 and 1992. However, the demand for reinsurance of the primary insurers and large corporations has also changed. In Western Europe, consolidation and deregulation have been a force towards lower cession rates, but the emerging markets have shown a stronger growth in the demand for reinsurance compared with the demand for primary insurance. Real growth (1990-1997) and regional distribution of premiums (1997) are charted for both life and non-life insurance markets, along with market concentration-combined ratios (1990-1997) and the largest mergers and acquisitions among reinsurers since 1994.

So far, insurers have regarded the Internet mainly as a new marketing tool and, to a lesser extent, as an additional distribution channel for their products. The reasons for this reluctance to fully embrace the opportunities of the new technology include the complexity of some products, the difficulty of standardizing claims settlement, the low frequency of insurance purchases, still unresolved security issues and regulatory hurdles. Yet, insurers are challenged more often by new entrants, increasing competition and margin pressure, which force them to rethink the distribution of insurance products, the business processes and the vertically integrated business model. A chart providing information about e-business savings potential in US property/casualty insurance is presented.

Detailed sedimentological, geochemical, palynological, and aquatic-microfossil analyses on a new composite profile (Para-Reference Profile Schöningen 13 II and Zeugenblock 13 II [2018]) exposed at the archaeological excavation site of Schöningen 13 II reflect several phases of newly recorded lake level fluctuations and vegetation changes. A pronounced deforestation and the expansion of grasses and herbal plant communities characterize the first steppe (open woodland) phase, which follows the interglacial forest communities. A succeeding tripartite woodland phase predominantly marked by Betula and Pinus is followed by another rather dry steppe phase and a second woodland period, which includes the famous archaeological “spear horizon” 13 II-4ab. Transition into a cold period is indicated by progressive desiccation of the lake and a shift to a steppe/tundra vegetation. Novel 3D images of the 10 most characteristic phases of the Reinsdorf sequence have been constructed based on the botanical data (macro remains as well as palynomorphs), terrestrial vertebrate faunal, geochemical, sedimentological, and previously established data from aquatic microfossils. In addition, a tentative correlation between the post-interglacial phases of the Reinsdorf sequence and Marine Isotope Substages 9d–9a, based on biostratigraphical as well as sedimentological data, is proposed.