Travelers Chairman and CEO, Alan Schnitzer, made a special visit to connect with policyholders impacted by the devastating #wildfires that swept through the #LosAngeles area in January. His article below outlines the importance of insurers being able to properly assess risk and set fair prices in order to maintain the reliable function of California's insurance market in the face of natural disasters. Read more: https://lnkd.in/gqre6ynU #insurance #wildfire #mitigation #resiliency #Travelers #California #naturaldisaster #catastrophy
In the aftermath of the devastating fires that swept through Los Angeles neighborhoods in January, I visited the area to see the damage firsthand and meet with affected customers and employees. It was a heartbreaking scene – families mourning lost homes, businesses facing uncertain futures, entire communities grappling with unimaginable loss. While the full impact of the event is still unfolding, and much remains to be done to support these communities in their recovery, it is important that lessons from a tragedy like this lead us toward better approaches. That means taking meaningful steps to mitigate and adapt to more frequent extreme weather, as well as addressing the underlying factors that leave communities vulnerable to both personal and financial harm. While climate change is rightly cited as an explanation, this is an incomplete answer to a more complex problem. Economic inflation, aging infrastructure and population migration into higher-risk areas have emerged as primary drivers of rising weather-related losses – trends that will likely continue. There is also a constellation of other factors. Consider, for example, the staggering cost of litigation abuse, as well as development decisions and building practices that fail to account for foreseeable extreme weather events. Insurance plays a critical role on the sustainable path forward. At its core, insurance is a cost-sharing mechanism, bringing individuals and businesses together to pool resources through premiums that accurately reflect each policyholder’s exposure to risk. When insurers can properly assess risk and set fair prices, this system functions reliably – even in the face of extreme weather. Importantly, insurance also serves as a crucial barometer of the true cost of building or rebuilding in higher-risk areas, allowing these costs to be properly considered during planning and development. Read more here: