‘Secondary perils’ — which are independent small to mid-sized events, or secondary effects of a primary disaster.
We always think about the "BIG" disasters that come and cost billions and billions of dollars. Those are the disasters where insurance companies often turn to re-insurance companies like Swiss Re.
Read this summary, Environmental “secondary perils” an increasing threat: Swiss Re which details that it is not always the big events that will collectively take down the economic interests of not only insurance companies, but communities.
A multitude of smaller events on their own or a combination of huge events and then also the secondary consequences of the mega-events that are starting to add up.
They call them "environmental" but in our American lingo, it would mean natural hazards.
See this quote: “Large losses from secondary perils are occurring more regularly”, says Edouard Schmid, Swiss Re’s Group Chief Underwriting Officer. “This is a trend the insurance industry must act on so that we can continue to underwrite catastrophe business sustainably.” To summarize, the smaller ones add up!
I read a totally different report today about the solvency of Social Security and Medicare. The date they project expenditures to exceed funds available is 2035, which is really only about 15 years away. These social programs with funds running low are like other disaster-related issues. They are:
1. Not staring us in the face, or perceived not to be staring us in the face
2. The general public is not up in arms, therefore our political leaders across the board are not motivated to take action — meaningful action. "Can we solve this by cutting taxes?"
3. Action will be taken, but only when portrayed as looming, a calamity — kind of like a tsunami that has been detected and is on its way, confirmed, etc. Thus there will be a race to "take substantive action" when it has become a bit late to do anything meaningful in a preventive way.
Why take action today when you can put action off until tomorrow. Until then, eat, drink, borrow money and be merry!
Claire Rubin, Senior Researcher, shared the link above. She is the Recovery Maven, Guru and of course the Diva of Recovery