No Assurance: Insurance - the tide has turned
|Stress Toy - source Amazon.com|
Since 2011, you could be forgiven for feeling that the tide has turned on the viability of insurance, yet for many it is a non-negotiable situation, a requisite to secure an asset for one's creditors.
But the buck has to stop somewhere, and it does when the risk exceeds the tipping point for the insurer, the re-insurer and whoever rides above that level. Swiss Re is one of the big global players.
Wikipedia describes Insurance as:
a risk management technique primarily used to hedge against the risk of a contingent, uncertain loss that may be suffered by those individuals or entities who have an insurable interest in scarce resources, by transferring the possibility of this loss from one interested person, persons, or entity to another.
The scarce resources referred to here fall into three divisions: human resources, financial resources, and capital, or tangible resources.
In the context of insurance, scarce resources are also known as "exposures," because they are "exposed" to perils, those things, or forces, which cause destruction or reduction, in the usefulness, or value, of an exposed resource. Human resources are thus exposed to perils such as illness or death; financial resources to legal judgements that may result from negligent acts, and capital resources to physical perils such as fire, theft, windstorm, and vandalism, to name but a few.
A hazard is the cause of a peril. e.g. an earthquake causes damage and destruction.
For latest updates scroll to end of postHere is a Herald feature by Peter Huck on this subject, particularly the changing climate, both environmentally and fiscally, threatening the capacity of insurance to cope.
June 27 2011 in New Zealand we hear that Civic Assurance, which insures local government organisations, will not renew cover for property in respect of the Christchurch and Waimakariri Councils. Their policies thus end on June 30 2011 and they will have to shop elsewhere. Furthermore, the same change of policy will be applied by Civic to other councils in NZ. They will all have to shop around and pay a higher price for cover. Civic is in fact owned by local councils, but it cannot get re-insurers to back it. Councils will have to go cap in hand to central government to sort out this further mess.
NZ now faces local council insurance premiums increasing up to 400% and the flow on effects from Christchurch & Waimakariri being uninsured place public amenities in jeopardy. Infrastructure that is below ground -water, sewerage and possibly power are most likely to be excluded from cover.
The effect is that policies on this civic level have been radically rewritten and the same changes will occur with policies for individual property owners.
This news only adds to the maelstrom of woes facing Canterbury. When the failure level extends from the personal, to possessions, to local infrastructure, to lifestyle, to the face of a city, to the functioning of local government, the alarm bells are on full volume.
Like a stress toy, people are being squeezed from both ends.
Understanding insurance is a key to knowing why this system is being severely challenged. There are almost endless types of insurance (Any risk that can be quantified can potentially be insured - WIKIPEDIA) but the one most problematic at the moment would be the various examples covered by the term property
In terms of property insurance, basically a resource is assessed in terms of its potential to fail, be lost, damaged or destroyed.
In astrology Taurus covers material objects in general, personal possessions.
Pluto is resonant with shared resources - community or held in partnership
Saturn shares the same energy as with fear/risk aversion, the concept of insurance, loss, failure, wrecks, ruins.
Uranus features in unexpected events, sudden changes, earthquakes, electrical/electronic systems
In June 2011 Pluto's zodiac position is moving back from 7 to 6 degrees Capricorn
Uranus ranges from 4 to 4.5 degrees of Aries
Saturn ranges from 10.5 to 10.7 degrees of Libra
The 3 zodiac signs are seasonal markers (solstice and equinox) and as such Aries is opposite Libra, with Capricorn at end of year. This seasonal connection gives these signs (and their 4th member, Cancer,) powerful elemental energies.
The positions in June show that Pluto has been sitting at the mathematical middle point of the positions of Uranus and Saturn. ( quick maths show that 7 is the midpoint of 4 and 10 degree positions. This is very significant. Pluto and its corresponding issues - those relevant here, noted earlier, is in a stressing right angle or 90 degree position in respect of the merging energies of Uranus and Saturn.
Look at the keywords outlined earlier for these 3 planetary positions and put these into a context of stress, disharmony conflict, generated by the 90 degree angle of Pluto and the current situation in Christchurch is a very clear match, showing that this global pattern has a particular relevance to the geographic location of Canterbury-Christchurch. Be assured that other places, not necessarily reported on our limited news services, will be facing these same issues now and into the future, as a consequence of extreme weather or natural events.
So what happens once the June 2011 pattern ends? Little if any respite, since similar themes are perpetuated by new patterns over the next 5 years.
We have already turned the corner into a most turbulent period, on multiple levels. 2011 in particular has allowed people to work out that something particularly powerful is occurring in the world involving both massive political upheaval and new structures put in place. But that is not all: Earth itself in undergoing restructuring. But neither of these matters will resolve quickly
The structure of many known things will alter: governments, systems, organizations. Property and resources are central to these changes, meaning our relationship to these things is shifting, marked by reduced resources. Changing attitudes to things Conflict in 2013, 2014 over resources. Drought will feature before and including 2016 in vulnerable parts of the globe.
Many believe a more significant global economic meltdown is waiting in the wings.
In the simplest of terms, insurance as we know it, may be a waste of money since the insurers may be unable to cover against increasing risk and in the face of further bankrupting events, few if any may be paid out. Higher premiums will also lead to high rates of uninsured property. The tide has turned. In the view ahead, having insurance could be more risky than not having it.
Consider some options that are far simpler and far less materialistically embedded if you want to bear the coming years with far less angst.
Update July 7
An interesting blog post from Brent Walker, an Australian member of the financial risk aka insurance industry, noting the link between solar minimum periods ( which we are in now) and increased seismic, volcanic events. Lots of data provided.
Scientific paper online re this topic
Scientific paper online re this topic
Update Sept 25 2011
Reinsurers may wait until 2014 at the earliest to take on further risk in Christchurch
Also refer to Christchurch Shakes Again and Again for seismic updates & commentary.
January 5 2012
Read the global stats re insurance claims in 2011 -this article adds to the text of this post
Excerpt from Chch Press:
Natural disasters, led by catastrophic earthquakes in Japan and New Zealand, cost a record US$380 billion (NZ$483b) last year, more than double the figure for 2010 and triple the average for the past decade, insurance experts have reported.
Insurance woes continue in Christchurch following 4 major phases of quake events, commencing Sept 2010 - report
Insurance matters are still unresolved on a large scalwe in Christchurch, but this is not just a local problem
Sarah Miles book:
The Christchurch Fiasco : the Insurance Aftershock and its Implications for New Zealand and BeyondJay Feinman's book Delay Deny Defend on insurance issues for policy holders