# Hurricane Harvey highlights magnitude of insurance protection gap, according to Aon outlook report Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2017-09-13 Category: INSURANCE Category URL: https://financedigest.com/category/insurance Meta Title: Aon Benfield Reinsurance Market Outlook Report September Meta Description: Learn about the global under-insurance issue and over-capitalisation in the insurance industry in Aon Benfield's September 2017 report. URL: https://financedigest.com/hurricane-harvey-highlights-magnitude-of-insurance-protection-gap-according-to-aon-outlook-reporthtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/fd130917-8-1736843504290-compressed.jpg) Over-capitalized insurance industry at odds with environment of global under-insurance Aon Benfield, the global reinsurance intermediary and capital advisor of Aon plc (NYSE: AON), today releases the September 2017 edition of its Reinsurance Market Outlook report, which assesses the key drivers of reinsurance supply and demand in the approach to the January 1 renewals. The report finds that a significant proportion of the unprecedented flood losses generated by Hurricane Harvey in Texas and Louisiana will be uninsured, again highlighting the existence of a global protection gap. As a result, those affected will require substantial financial [support from the United States](https://www.financedigest.com/u-s-state-officials-urge-support-for-landmark-26-billion-opioid-settlement.html "U.S. state officials urge support for landmark billion opioid settlement") government. The United States is one of the most insured countries in the world and yet, in 2016, almost 50 percent of the economic losses sustained from natural disasters remained unprotected, according to data compiled for Aon Benfield’s most recent Annual [Global Climate and Catastrophe Report](https://www.financedigest.com/global-body-urges-eu-to-make-company-life-simpler-by-aligning-climate-reporting.html "Global body urges EU to make company life simpler by aligning climate reporting").  Much of the rest of the world remains chronically under-insured, at a time when the frequency of severe weather events is increasing. Meanwhile, the first [half of 2017 saw a renewed surge](https://www.financedigest.com/zara-owner-inditexs-first-half-sales-surge-ahead-of-potential-slowdown.html "Zara owner Inditex’s first-half sales surge ahead of potential slowdown") of capital into the reinsurance sector, raising the total capital available to a record level of USD605bn at June 30, 2017, according to Aon Benfield figures. Eric Andersen, [Chief Executive Officer](https://www.financedigest.com/future-market-insights-appoints-aditi-basu-as-chief-marketing-officer.html "Future Market Insights Appoints Aditi Basu as Chief Marketing Officer") of Aon Benfield, said: “Hurricane Harvey has had devastating consequences and unfortunately many of the losses are uninsured, leaving the United States government, and therefore taxpayers, to pick up most of the bill. At the same time, we have an ‘over-capitalized’ reinsurance [industry and new investors actively seeking access to diversified insurance risk](https://www.financedigest.com/automated-cyber-risk-quantification-saving-the-insurance-industry.html "Automated Cyber Risk Quantification: Saving the Insurance Industry"). The frequency of severe weather-related losses is increasing and there [needs to be a significant step-up in the efforts made to address the protection](https://www.financedigest.com/regulators-need-to-strike-the-balance-between-protection-and-strangulation.html "REGULATORS NEED TO STRIKE THE BALANCE BETWEEN PROTECTION AND STRANGULATION") gap evident globally. The Reinsurance Market [Outlook report](https://www.financedigest.com/reinsurance-demand-increasing-as-growth-opportunities-emerge-according-to-aon-outlook-report.html "Reinsurance demand increasing as growth opportunities emerge, according to Aon outlook report") reveals that major reinsurers continued to produce solid results in the first half of 2017, driven by a relatively benign loss environment and stabilized investment returns. It also [highlights the competitive impact of a surge in alternative](https://www.financedigest.com/meat-alternatives-market-expectations-growth-trends-highlighted-until-2031.html "Meat Alternatives Market Expectations & Growth Trends Highlighted Until 2031") capital at the mid-year renewals. Based on preliminary figures, and prior to the impact of Hurricane Harvey, insured losses for the first eight months of 2017 totaled USD24.5bn, representing 56 percent of the 10-year [average for the period](https://www.financedigest.com/fine-chemicals-market-is-estimated-to-witness-an-average-pace-with-a-cagr-of-5-4-during-the-forecast-period-2022-2032.html "Fine Chemicals Market is estimated to witness an average pace with a CAGR of 5.4% during the forecast period 2022-2032"). The reinsured component of these losses was low, given that a high proportion related to localized severe weather events in the United States. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---