As disasters like the wildfires that devastated the Hawaiian town of Lahaina and the storms that tore apart roofs from Alabama to Massachusetts last week intensify, insurance companies have pulled back from offering coverage in certain areas or cut the kinds of damage they will pay to repair.
A little-noticed slice of the financial industry that provides insurance to insurers, called reinsurance, has helped drive the changes.
These companies promise to step in with cash — usually huge amounts — when something like a hurricane, wildfire or other big disaster creates damage that is too costly and widespread for insurance companies to pay for on their own.
And at the beginning of the year, nearly all of them raised prices.
That led to a flurry of tense negotiations between those insurers and firms, like Swiss Re, Odyssey Re and other reinsurers, many of whom are headquartered outside of the United States.
Persons:
reinsurers
Organizations:
Farmers, Swiss
Locations:
Lahaina, Alabama, Massachusetts, United States, Canada