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

Author

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  • Denise Desjardins

    (HEC Montréal)

  • Georges Dionne

    (HEC Montréal)

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?

Suggested Citation

  • Denise Desjardins & Georges Dionne, 2025. "A re-examination of the US insurance market capacity to pay catastrophe losses in 2024," Working Papers 25-03, HEC Montreal, Canada Research Chair in Risk Management.
    • Handle: RePEc:ris:crcrmw:021461
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