The Insurance Market Is Healing

Insuring the risk of catastrophic hurricanes and earthquakes risk probably isn’t getting cheaper. But at least there might be more coverage coming to relieve the troubled insurance market.

Going into last year, rising interest rates helped lead to a slower influx of capital into reinsurance, which is the backstop that insurers use to protect against so-called tail risks such as hurricanes and earthquakes. That finally gave the upper hand to reinsurers in pricing negotiations, after several years of seeing their pricing struggle to keep up with the rising losses on global catastrophes. That in turn led primary insurers that sell coverage to individuals and businesses to bear more of their own risk.

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