AIR President: Exposure Growth Main Driver of Cat Losses

An AIR Worldwide catastrophe modeling executive is warning property/casualty claim professionals that they face “a five percent chance we’ll have losses greater than Hurricane Katrina in 2006.”

The remarks were made by Karen Clark, president and CEO of AIR, at the 2006 Property Claim Service’s Catastrophe Conference. She also predicted catastrophe losses “will double about every 10 years due to increases in the numbers and values of properties at risk,” due to exposure growth, which she deemed as the main driver of cat losses. Clark also noted that aggregated commercial and residential replacement costs have more than doubled in the United States over the past 10 years, with the cost per square foot of residential buildings up 40 percent nationwide.