Property And Casualty Insurance Trends

Recent world events have instilled a sense of fearlawsuits. A well-publicized Texas lawsuit resulted in
in anyone who turns on the television or opens aa staggering $32.1 million decision -- extremely
newspaper. People are more aware of theirprofitable for the owner, potentially devastating
vulnerabilities, and more interested in purchasingfor the property and casualty insurance industry.
insurance. The irony is that the same disasters,The terrorist attacks of September 11 greatly
disease and acts of war have created a negativecontributed to the negative impact on the
trend in the property and casualty insuranceproperty and casualty insurance industry. It has
industry, to the point where these types ofbeen reported that property and casualty
insurance are more expensive and more difficultinsurance claims related to the events of
for consumers to obtain.September 11 totaled as much as $70 billion. The
The property and casualty insurance industrysame event has also caused the decline of the
posted a $7.9 billion net loss in 2001. According tostock market, adding to the insurance industry's
the Insurance Services Office (ISO) and thedownward trend.
National Association of Independent InsurersThis negative impact has also had a detrimental
(NAII), this is first time that the industry has evereffect on the real estate industry, where
reported a net loss. Experts predicted a negativeproperty and casualty insurance is essential.
2.7 percent return rate for property and casualtyProperty and casualty insurance coverage is
insurance, almost 6.5 percent lower than theessential when applying for a conventional,
return rate of the year 2000.government-assisted and commercial mortgage;
These losses have caused a number of propertywithout it, lending companies will reject the
and casualty insurance companies to cut back inmortgage application. Therefore, the real estate
an effort to economize. One step taken tomarket cannot function properly if this type of
reduce losses was to avoid adding any newinsurance is more expensive or less accessible. In
property and casualty insurance policies. Thereal estate, mortgages are paramount in closing
insurers have also purposefully stopped updatingthe vast majority of sales. Without property and
or renewing existing property and casualtycasualty insurance, there won't be any
insurance policies. As a result, the premium pricemortgages, and sales in the real estate market
of property and casualty insurance policies haswill plummet. Moreover, without property and
increased.casualty insurance coverage, homeowners would
A number of factors are said to have caused thefind it difficult or impossible to maintain their
property and casualty insurance problem, includingmortgage obligations. Lenders would be forced to
acts of terrorism, natural disasters, economicforeclose on the property, or subject the
turmoil, and even mold.homeowners to expensive lender forced-place
The headline of one trial lawyer publication, "Mold iscoverage.
Gold", indicated that recent court decisions againstNo one can contest the devastating personal
insurers had jeopardized profitability of theconsequences of natural disasters, acts of
property and casualty insurance industry. Invasiveterrorism and disease. The insurance and real
mold was recognized as the latest householdestate industries are two examples of how these
hazard, and property and casualty insuranceevents have had a negative impact on our
policyholders were cashing in with lucrativeeconomy as well.