As we climb out of the settling dust from the 2005 hurricane season and look forward, what can we expect from the Surplus Lines market in 2006? It may still be too early to accurately say where we are headed at this point. Multiple factors are impacting the availability of property coverage for the immediate future, and perhaps for years to come. These factors include: significant international losses as well as the those experienced in our Southeastern United States in the past few years; the availability and cost of reinsurance due to these large losses; modeling that saw losses many times more than anticipated; continuing claim payment activity with demand surge costs; downgrading/loss of available carriers; and new players on the horizon. It's important to review all of these factors to get the total picture.
Worldwide Impact
The ravages of Hurricanes Katrina, Wilma, and Rita have left Florida and the other Gulf States reeling, but 2005 wasn't good to the rest of the world either. In January of 2005 Windstorm Erwin blew through the United Kingdom and traveled across northern Europe and into Russia causing damage in the billions. There also were floods in Europe as well as a massive earthquake along the border between Pakistan and India.
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