A re-examination of the US insurance market capacity to pay catastrophe losses in 2024

Denise Desjardins and Georges Dionne ()
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Denise Desjardins: HEC Montréal

No 25-03, Working Papers from HEC Montreal, Canada Research Chair in Risk Management

Abstract: The goal of this research is to assess the insurance industry ability to absorb catastrophe losses and evaluate its capacity to spread risk across insurers. Dionne and Desjardins (2022) showed that the US insurance industry capacity to pay catastrophe losses was higher in 2020 than it was in 1997. Insurers could pay 98% of a $200 billion loss in 2020, compared to 81% in 1997. In this document, we consider the following research question: Is the capacity still adequate after three years of turbulence? Climate risk events have caused average home premiums to increase by 22% from 2020 to 2023 (The Guardian, December 2024). Was it sufficient to maintain market capacity?

Keywords: Catastrophe losses; insurance market capacity; premiums increase; insurer capital; insured losses (search for similar items in EconPapers)
Pages: 140
Date: 2025-08-06
New Economics Papers: this item is included in nep-env and nep-rmg
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Persistent link: https://EconPapers.repec.org/RePEc:ris:crcrmw:021461

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