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CEO Viewpoint: Predict and Prevent Just Makes Economic Sense

March 28, 2024 by Peter L. Miller

Last year, U.S. P/C insurers incurred a $21.2 billion net underwriting loss, only slightly improved from a $24.9 billion underwriting loss recorded in 2022. Roughly $65 billion in natural catastrophe losses hit P/C insurers last year. The August 2023 Maui wildfires alone contributed an estimated $4-$6 billion in damages.

Executive Summary

Following up on his prior opinion piece, "It's No Longer Enough Just to Insure," Peter L. Miller, president and CEO of The Institutes, writes that predicting and preventing catastrophic events, as well as the day-to-day risks, is critical to the economic sustainability of insurers. In addition, he suggests that if there are ways to prevent the devastation of events like wildfires in Maui last year, then members of the risk management and insurance community "have an ethical and moral responsibility" to do so.

Executive SummaryFollowing up on his prior opinion piece, “It’s No Longer Enough Just to Insure,” Peter L. Miller, president and CEO of The Institutes, writes that predicting and preventing catastrophic events, as well as the day-to-day risks, is critical to the economic sustainability of insurers. In addition, he suggests that if there are ways to prevent the devastation of events like wildfires in Maui last year, then members of the risk management and insurance community “have an ethical and moral responsibility” to do so.

As the severity and frequency of losses continues to increase exponentially, so does the cost to repair damages after a loss occurs. This is making insurance’s traditional approach of detecting and then repairing after a loss no longer economically viable.