Insiders from the insurance industry are issuing a stark warning that property insurance coverage may soon become virtually nonexistent in many areas. These experts also warn of the potential for a new global financial crisis, as reported by the publication. A memo titled “A Call to Warning,” which magazine Spiegel cited, was published by an anonymous group of senior executives from the insurance sector. This memo was compiled by the non-profit British organization “Inside Track.”
“Inside Track” provides a platform for high-level corporate executives to speak anonymously about their businesses. The group issuing this warning is composed of leaders from some of the world’s largest insurers, reinsurers, and insurance brokers, with members operating across the UK, Switzerland, and the EU.
The group’s caution is comprehensive: they assert that governments and consumers should no longer rely on insurers to cover damages in the future. The insurers have already begun deploying a three-step strategy. First, they are increasing premiums, which will make insurance coverage unaffordable for many. Second, they are adjusting or restricting coverage, for example, by excluding damages caused by wildfires from building insurance policies. Finally, insurers are completely pulling out of specific sectors, regions, and communities. The authors of the memo warn that if properties begin to lose protection en masse, this could lead to a new financial crisis. They point out that the destabilization of the mortgage market significantly contributed to the global financial crisis of 2008. These insiders caution that a sharp increase in uninsured, particularly vulnerable properties could trigger a similar development.
