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Multinational Insurers and Catastrophic Loss: Responses to the San Francisco Disaster of 1906

In: Natural Disasters in the United States

Author

Listed:
  • Robin Pearson

    (University of Hull)

  • Mikael Lönnborg

    (Södertörn University)

Abstract

An important share of the huge economic burden caused by natural disasters is carried by the insurance industry. This chapter examines the impact on international insurance of one of the greatest disasters in American history: the San Francisco earthquake and fire of 1906. It has three aims: first, to explore the response of foreign fire insurers to the catastrophe, and their decisions to stay or quit the Californian market; second, to examine whether modern theory helps explain those decisions; third, to explore how the experience of insurers operating in San Francisco illuminates one of the central themes of this book—the particularity of American responses to natural disasters. We identify four factors—economic, market, company-specific, and institutional—whose interplay determined the effect of this disaster on the multinational insurance companies operating in California in 1906 and their post-disaster strategic decisions. In particular, powerful informal institutional pressures generated by the singular American approach to natural disasters narrowed the scope for reducing costs by those insurers who wished to remain in the market and drove other foreign insurance companies to quit the market altogether.

Suggested Citation

  • Robin Pearson & Mikael Lönnborg, 2025. "Multinational Insurers and Catastrophic Loss: Responses to the San Francisco Disaster of 1906," Risk, Governance and Society, in: Natalie Rauscher & Welf Werner (ed.), Natural Disasters in the United States, pages 193-219, Springer.
    • Handle: RePEc:spr:rischp:978-3-031-96436-7_10
    DOI: 10.1007/978-3-031-96436-7_10
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