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The Insurance Economics of Going Green Insurance at the Vanguard Institute for Business and Home Safety Annual Conference Tampa, FL December 1, 2009 Download at www.iii.org/Presentations/ Robert P. Hartwig, Ph.D., CPCU, President & Economist Insurance Information Institute 110 William Street New York, NY 10038 Tel: (212) 346-5520 Fax: (212) 732-1916 [email protected] www.iii.org Presentation Outline • Going Green: Insurance Industry Update A challenge that is being met • Seeing Green: Summary of Insurer Initiatives • Case Studies in the Demand for Green Insurance Products 1. 2. Green Home: Home as Power Plants Green Commercial Power Generation • Energy Demand, Energy Policy & Climate Change Huge growth in energy demand will fuel demand for insurance • What Motivates Insurers to “Go Green”? Role of Catastrophe Losses Role of Demographics & Economics Q&A 2 “Going Green”: Insurance Industry Update Going and Staying Green is a Challenge not Unlike Countless Others Insurers Have Met for Centuries What “Going Green” Really Means for P/C Insurers • The Fundamental Role of Insurers is to Assess & Quantify Risk • Quantification Permits the Risk to be Accurately Priced • Determination of Price (Premium) Allows Risk to Be Transferred from Bearers of Risk (Policyholder) to Insurer in Exchange for Risk Appropriate (Actuarially Sound) Premium • The Role Played Insurers and the Process of Pricing “Green” or or “Climate” or “Environmental” Risks is No Different than Any Other Risk Assumed Over the Centuries • Insurers Can Play a Key Role in the Area of Climate Risk Only if Two Conditions Are Met: • Insurers are allowed to charge risk appropriate premiums on new products that are designed to mitigate climate risks • Insurers are allowed to adjust premiums, underwriting criteria, risk assessment and risk management practices to reflect actual and expected changes arising from climate threats • Where These 2 Conditions Are Met, Insurance Markets Functions Well; Shortages, Govt. Plans if Not Met. • Biggest Threat is Regulatory Interference (Rate, U/W) 4 Economics of Green Insurance Follows a Time-Tested Process RISK IDENTIFICATION RISK QUANTIFICATION Property Damage Loss Trending Liability Risks Catastrophe Modeling Management Liability Scientific Research Political Risk Climate Models Economic Risk Tort Threat Assessment Regulatory Risk Regulatory Environment Investment Risk RISK MITIGATION (SOLUTIONS) Risk Transfer (New or Adapted Insurance Products) Capital Market Solutions Risk Retention Loss Avoidance & Reduction Building Codes & Land Use Uninsurability Issues Source: Insurance Information Institute Prevalence of Insurer Climate-Related Activities: 2008 Understanding CC Problem Carbon Risk Disclosure** 6% 14% Creating innovative insurance solutions is #1 activity, among 643 activities. Promoting Loss Prevention 9% Aligning Terms & Conditions w/ Risk-reducing Behavior 6% Crafting Innovative Insurance Products 22% Leading by Example 17% Offering Carbon RM & Offsets 5% Building Awareness & Participating in Public Policy* 14% Financing Customer Improvements Investment in CC Solutions 2% 5% *A maximum of 1 is tallied, as there is too much subjectivity in assigning weights to each individual activity **Multi-year responses to a given disclosure initiative are counted once. Source: Ceres: From Risk to Opportunity: 2008 – Insurer Responses to Climate Change Insurer Climate-Related Activities 2008 vs. 2007 Meeting the demand for insurance products is the most important role of insurers—and is experiencing the fastest growth Source: Ceres: From Risk to Opportunity: 2008 – Insurer Responses to Climate Change Key Insurer Climate-Related Innovations and Trends Source: Ceres: From Risk to Opportunity: 2008 – Insurer Responses to Climate Change Insurer Climate Risk Practices for Underwriting, Investment and Asset Management Source: Ceres: From Risk to Opportunity: 2008 – Insurer Responses to Climate Change Green Insurance Market Map by Insurance Line Homeowners Industrial, energy, property Real Estate Business Interruption Flood Rebuild more resilient or green after loss ■ ■ ■ ● ● Bundled carbon offsets ■ ● ● -- -- Incentives for low-emissions or loss-resilient profile ■ ■ ■ ● ● Performance: Energy savings & carbon reduction risk ● ■ ■ ● -- Performance: Energy production & carbon reduction risk ■ ■ ● ■ -- Finance for carbon-reducing or loss-resilient improvements ■ ● ● -- ● Advisory, inspections, or riskmanagement services ■ ■ ■ ● ● Climate-risk modeling services -- ■ ■ ● ● ■ At least one current example of implementation by an insurer, reinsurer, or intermediary ● Applicable but no current insurer implementation -- Not applicable Source: Ceres: From Risk to Opportunity: 2008 – Insurer Responses to Climate Change Insurers Are Seeing Green Summary of Green Initiatives in Global Insurance & Reinsurance Markets Summary of Insurer Climate Activities in 2008 • • • • • Some 643 specific activities from 246 insurance entities from 29 countries These include activities on the part of: 189 insurers 8 reinsurers 20 intermediaries 27 insurance organizations 34 non-insurance entities Property insurers (Home, Comml., Auto) are driving majority of activity while life-health insurers lag behind Significant increase in activity by liability insurers in past year – insurers to willingly bear climate-related litigation costs borne by policyholders? Minor activity in travel, warranty, industrial, BI, inland marine, WC, crop, prof. liability, and comm. auto insurance Source: Ceres: From Risk to Opportunity: 2008 – Insurer Responses to Climate Change Availability of Insurance for Renewable Energy Products Source: Ceres Wind power generation risks are readily insurable; Biofuels, waste not far behind. Insurer Climate Activities in 2008 • • • • • • European insurers have deepest history with climate initiatives Some 37% of all activities logged in the United States, the most of any country. More activity in Europe as a whole (47%) vs. North America (40%) Growth since 2007 in all areas, but particularly: climate science and analysis, crafting innovative products, carbon RM and offsets, and leading by example Areas with lowest year-over-year increase in activity are: loss prevention and direct investment in climate-friendly industries. In past 10 years, the number of climate-related activities has increased eight-fold Source: Ceres: From Risk to Opportunity: 2008 – Insurer Responses to Climate Change Key Innovations and Trends • • • • • • Many more insurers offering “green-buildings” products and services Almost all climate-related innovations in D&O, political risk, prof. liability and enviro. liability have appeared in past year Auto and Transport: two dozen insurers now offer payas-you-drive (PAYD) insurance with discounts up to 60% for policyholders who drive less than avg. driver 2008 First: insurance products to manage risks from carbon capture and storage (CCS) projects More attn. on renewable energy as a market for insurance Climate-related microinsurance – coverage for lowincome populations w/out access to traditional insurance – about 7 million policyholders Source: Ceres: From Risk to Opportunity: 2008 – Insurer Responses to Climate Change Key Innovations and Trends • • • • • Insurer investment in and financing of low- and nocarbon technologies more common but still small proportion of total investments Increasing participation in carbon markets, including carbon trading, ins. for credit risks, political risks, plus advisory services, and carbon-neutral products At least 25 insurers now prepare annual Corporate Social Responsibility reports More insurers recognizing correlation between sustainable practices and reduced risk, e.g. discounts on WC and Enviro. for customers with sustainable practices Insurers increasingly recognize importance of addressing carbon footprints, e.g. 17 insurers and reinsurers & 6 brokers have achieved carbon neutrality. Source: Ceres: From Risk to Opportunity: 2008 – Insurer Responses to Climate Change Green Buildings Encouraging GHG reductions while reducing risk: green buildings • High impact: ~40% of GHG emissions are associated with building use – green building practices can reduce emissions by 50%+ • Loss prevention benefits of green buildings – improved indoor air quality – disaster resilience • Large potential market: $140B in green building in US by 2013 • 39 products from 22 companies • New idea: “retro-commissioning” Source: Ceres ClimateWise Initiative • 40+ insurers under the ClimateWise umbrella recently called for a 40% cut in global GHG emissions by 2020 The climate crisis poses a systemic risk to the global economy…Climate change must be tackled now if insurers are to continue to play their fullest role in managing climate risk. … If governments fail to act today, substantial markets may become uninsurable tomorrow.” -ClimateWise statement, 22 October 2009 • ClimateWise is result of work initiated by HRH The Prince of Wales in the UK with the insurance industry Source: ClimateWise: http://www.climatewise.org.uk/ Climate Risk Disclosure The SEC is moving toward mandating disclosure in 2010: • Oct. 2 speech by Commissioner Walter – “I believe that it is time for us to consider issuing interpretive guidance regarding [climate risk] disclosure.” • Oct. 19 interview with Walter – SEC staff are preparing recommendations. Two options on the table: guidance and rulemaking. NAIC unanimously passed a climate disclosure survey in March 2009 – Two areas of focus: Climate Change Impact Assessment • Geographic areas subject to rate increases or non-renewals • Investment risk • Covered perils subject to future exclusions or limitations • Access to reinsurance • Solvency risk and capital requirements • Cat modeling Climate Change Mitigation Activities • Loss mitigation and prevention: – Policies and products – Risk classification • Invested assets Source: Ceres; NAIC • Loss reserves McGraw Hill Construction Green Outlook 2009 •Green building has become a growing part of today’s construction industry •Despite the market downturn, 75% of commercial real estate execs say they will continue to build green •By 2013 McGraw-Hill Construction estimates today’s green building market will more than double to $96-$140B vs. $36$49B today for residential and nonresidential buildings • Green building has expanded rapidly due to no. of factors such as growing public awareness of green practices, heavy increase in govt. interventions, and recognition by owners of bottom line advantages • The amount of green office space constructed in 2008 was about 25X the amount in 2000 and is growing at 50X that rate Source: McGraw Hill 2009 Green Outlook Green Buildings: Hype or Sound Investment? Study by University of San Diego and commercial real estate broker CB Richard Ellis Group found that: •Tenants in green buildings are more productive based on: av. # of sick days and a productivity change •Respondents reported an average of 2.88 fewer sick days in their current green office vs. their previous non-green office • Decrease in sick days translated into a net impact of nearly $5.00 per sq ft per year based on av. tenant salary, office space of 250 sq ft per worker and 250 workdays a year. Increase in productivity translates into net impact of $20 per sq ft • Study also found green buildings have 3.5% lower vacancy rates and 13% higher rental rates than the market • Findings based on surveys of 154 buildings under CBRE’s management totaling over 51.6m sq ft, housing 3,000 tenants in 10 markets across U.S. Source: Business Week, Green Buildings: Fewer Sick Days, Higher Rents, by Chris Palmeri, November 19, 2009 Case Study #1 The Green Home Green Home Insurance: Product Innovations Will Continue, but There Are Risks,Costs Turning a home “green” is not without risk or cost—a mini power plant “Green” Homes Have Distinct Insurance Coverage Needs •Photovoltaic panels •Electrolizer (splits water into H2, O2 molecules for night use) •Fuel Cell (recombines H2, O2 to generate electricity) •Water Tank •Additional plumbing, wiring •Charging Systems for Electric Car Source: National Geographic, Sept. 2009; Insurance Information Institute Solar Means Bring and Storing the Energy of the Sun to Where it’s Needed, When Needed Red areas are sunny and flat, but energy needs to be stored, transported “Green” Energy Needs Infrastructure & Insurance Solutions •Solar Involves Investment in New, Rapidly Changing Technology •Generation: Massive Solar Arrays; Photovoltaic; heated oil •Transmission: Need to Hook into Grid, Transport Hundreds of Miles •Storage: When sun doesn’t shine, need to store power—molten salt power tower Source: National Geographic, Sept. 2009; Insurance Information Institute Case Study #2 Green Commercial Power Generation Alternative Energy is More than Just Pretty Windmills—It’s Big Business “Green” Energy Also Has Distinct Insurance Needs •Expensive Equipment •CAT Exposure •New Technology •Liability Risks (known and unknown) •Massive Infrastucture Investment (generation, transmission, distribution) •Marine Risks •Employment Risks Source: Insurance Information Institute Climate Change/Energy Policy Risks and Opportunities for Insurers Abound Climate Change/Energy Policy Opportunities Abound… Massive increase in energy generation capacity and infrastructure required over next 20 years will drive demand for energy markets and related insurance products Large investments in traditional and alternative energy Heavy investment in technology required Some insurers want to participate in “cap and trade” …As Do Risks Concern that EPA designation of CO2 as a pollutant could lead to litigation State GHG emission standards may vary by state, causing confusion and litigation Political risk is high globally on global for energy issues Some calls to regulate investments of insurers 30 Source: Insurance Information Inst. World Net Effective Electric Power Generation, 1990-2030 (est.) Trillions of Kilowatt Hours 35 33.3 30.4 30 27.5 24.4 25 21.0 20 17.3 14.6 15 11.3 12.6 The current economic downturn will have little, if any, long-term impact on electric power generation 10 5 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 Source: Energy Information Administration, 2008 International Energy Outlook, Insurance Information Institute. 55.01 US Electricity Capacity Additions by Fuel Type, 2008-2030F Gigawatts 1.18 0 Coal 2008-2015 Natural Gas 2016-2020 13.29 11.64 27.13 9.33 8.57 Renewable growth will require new insurance solutions 0 29.98 2.46 10 1.75 20 17.84 30 21.54 25.43 40 30.35 50 Energy insurance demand will rise as capacity across all fuel types grows, led by natural gas and renewables 3.32 60 Nuclear 2021-2025 Sources: Energy Information Administration, Annual Energy Outlook, March 2009. Renewables/Other 2026-2030 8 2.63 0.764 2 0.956 4 3.754 6 Renewables Natural Gas 7.152 10 8.389 12 3.422 14 4.996 16 Trillions of Kilowatt Hours The sharp increase in generation and the changing composition of fuel source will influence insurance demand and the nature of products sold 3.16 18 15.361 World Electricity Generation by Fuel 2005-2030F 0 Liquids Nuclear 2005 2025 2010 2030 2015 2020 Source: US Department of Energy Report #:DOE/EIA-0484 ( Sept. 2008); Insurance Information Institute Coal Non-Hydro Renewable Electricity Generation by Energy Source (US): 2005-2030F Billions of Kilowatt Hours 450 400 350 300 250 Electricity generation from renewable sources is expected to rise 315% between 2007 and 2030 requiring new property and liability insurance solutions 317.76 180.55 200 150 428.25 103.27 100 50 0 2007 MSW/LFG* 2010 Biomass 2020 Wind 2030 Solar Thermal Sources: Energy Information Administration, Annual Energy Outlook, March 2009. Geothermal *Municipal Solid Waste/Landfill Gas. Grid Connected Electricity Generation from Renewables: 1990-2030F* Billions of Kilowatt Hours 500 Generation from renewables such as wind, biomass and solar could overtake hydro by 2019 450 400 350 300 250 200 Hydro Other Renewables 150 The energy insurance industry will evolve as customer needs change 100 50 Sources: Energy Information Administration, Annual Energy Outlook, March 2009; Insurance Information Institute. 2030 2025 2020 2015 2010 2005 2000 1995 1990 0 Electricity Supply Infrastructure: Despite Crisis, Huge Investments Needed Along With Insurance: 2001-2030 (Est.) North American investment could total $1.876 trillion $ Billions Investments in electricity supply infrastructure globally are expected to total $9.841 trillion between 2001 and 2030 $2,500 $1,913 $1,876 $2,000 $1,500 $1,351 $809 $1,000 $799 $783 $744 $377 $500 $609 $258 Africa Middle East Latin America S. Asia E. Asia China Russia Pacific North America Europe $0 36 Source: International Atomic Energy Agency , World Outlook for Electricity Investment. Share of Electricity Generating Capacity Based on Nuclear by Country, 2008 80% 76% 70% 60% 50% 104 nuclear facilities currently generate 20% of the US electricity supply. 17 companies have applied for $122 in federal loan guarantees to build 21 new reactors. Construction for the first 7 could begin by 2011 and come online by 2015-16 40% 28% 30% 25% 20% 20% 15% 13% 10% 4% 0% France Germany Japan US Canada UK Mexico 37 Source: International Atomic Energy Agency ; Insurance Information Institute. Growth in Global Nuclear Electricity Generation by Region, 2007—2020F 350% 300% 250% 200% Despite new capacity in the US, the developing world will see the fastest growth in nuclear electricity generation because the current capacity base is small 325.4% 150% 100% 78.0% 83.7% Far East Latin America 98.4% 49.6% 50% 9.3% 0% -50% -16.1% Western Europe North America Eastern Europe Source: Blue Chip Economic Indicators, 3/10/09 edition. Africa Middle East/South Asia World Energy Supply Infrastructure Investment by Category: 2001-2030 (Est.) $ Billions Distribution, $3,755 , 38% Transmission, $1,568 , 16% Generation will account for 46% or $4.5 trillion of all investment through 2030 to meet rising demand. Current downturn will have no impact on long-term global energy demand and the need to develop supply infrastructure Generation-New, $4,080 , 42% Generation-Refurbished, $439 , 4% Source: International Atomic Energy Agency , World Outlook for Electricity Investment. World Electricity Generation by Fuel Source Share: 2005 vs. 2030F 2005 2030 Liquids 2% Liquids 6% Nuclear 11% Nuclear 15% Renewable 15% Coal 41% Coal 47% Renewables 18% Natural Gas 20% Surprisingly, coal as a source of electricity generation is expected rise through 2030. CO2, pollution issues? Natural Gas 25% Source: Insurance Information Institute from data reported in US Department of Energy Report #:DOE/EIA-0484 ( Sept. 2008). What Motivates Insurers to Go Green? CATs, Demographics, Demand Concern Over Global Warming Remains High, But Has Waned The percentage of Americans who believe global warming is happening fell from 85% in 2006 to 72% in late 2009 % 100 85% 84% 80 80% 72% 60 40 20 A majority of Americans say global warming has been occurring and is a serious problem, but skepticism has grown since 2006. Possibly due to concern being redirected to the economy. 0 Mar 06 Apr 07 Source: Washington Post – ABC News poll, 11/24/09 July 08 Now Catastrophic Loss Catastrophe Losses Trends Are Trending Adversely, Though How Much, if Any, Is Due to Climate Change Is Unknown Global Natural Disasters: Economic and Insured Losses:1980 – 2009:H1 US$bn Overall and insured losses (Annual totals vs. first half-years) Overall losses*: Insured losses*: Annual totals Annual totals First half-years First half-years Source: Geo Risks Research, NatCatSERVICE © 2009 Münchener Rückversicherungs-Gesellschaft *Losses in 2008 values As of July 2009 44 Insured Property Catastrophe Losses as % Net Premiums Earned, 1984–2008 16% 14% 12% 10% US US average: 1984-2008 US CAT losses were a record 14.4% of net premiums earned in 2005 and were 4 times the 1984-2008 average of 3.6% 8% 6% 4% 2% 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 0% Sources: ISO, A.M. Best, Swiss Re Economic Research & Consulting; Insurance Information Institute. $40 $20 $7.5 $2.7 $4.7 $22.9 $5.5 $16.9 $8.3 $7.4 $2.6 $10.1 $8.3 $4.6 $26.5 $5.9 $12.9 $27.5 $60 $7.5 $80 2009 cat losses were down 29% in H1 from $10.6B in H1 2008 $26.0 $100 2008 CAT losses exceeded 2006/07 combined. 2005 was by far the worst year ever for insured catastrophe losses in the US, but the worst has yet to come. $9.2 $6.7 $120 $100 Billion CAT year is coming eventually $61.9 $ Billions $100.0 U.S. Insured Catastrophe Losses 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09* 20?? $0 *Based on PCS data through June 30 = $7.5 billion. Note: 2001 figure includes $20.3B for 9/11 losses reported through 12/31/01. Includes only business and personal property claims, business interruption and auto claims. Non-prop/BI losses = $12.2B. 46 Source: Property Claims Service/ISO; Insurance Information Institute Top 12 Most Costly Disasters in US History, (Insured Losses, $2008) $50 $45 8 of the 12 most expensive disasters in US history have occurred since 2004; $40 $45.3 8 of the top 12 disasters affected FL $ Billions $35 $30 $25 $20 In 2008, Ike became the 4th most expensive insurance event and 3rd most expensive hurricane in US history arising from about 1.35 mill claims $11.3 $11.3 $12.5 $15 $10 $5 $22.8 $23.8 $4.2 $5.2 $6.2 $7.3 $8.1 $8.5 Ivan (2004) Charley (2004) $0 Jeanne (2004) Frances (2004) Rita (2005) Hugo (1989) Wilma (2005) Northridge (1994) *PCS estimate as of August 1, 2009. Sources: PCS; Insurance Information Institute inflation adjustments. Ike (2008)* 9/11 Attacks (2001) Andrew (1992) Katrina (2005) 47 Total Value of Insured Coastal Exposure (2007, $ Billions) Florida New York Texas Massachusetts New Jersey Connecticut Louisiana S. Carolina Virginia Maine North Carolina Alabama Georgia Delaware New Hampshire Mississippi Rhode Island Maryland $2,458.6 $2,378.9 $895.1 $522B increase $772.8 since 2004, up 27% $635.5 $479.9 In 2007, Florida still ranked as the #1 $224.4 most exposed state to hurricane loss, $191.9 with $2.459 trillion exposure, an $158.8 increase of $522B or 27% from $1.937 $146.9 trillion in 2004. $132.8 $92.5 The insured value of all coastal $85.6 property was $8.9 trillion in 2007, up $60.6 24% from $7.2 trillion in 2004. $55.7 $51.8 $54.1 $14.9 $0 Source: AIR Worldwide $500 $1,000 $1,500 $2,000 $2,500 $3,000 48 Demographics Vulnerable Population and Property Values Are Rising Population of Florida, 1960—2030F Millions 35 30 Increasing coastal population and development are the principal reasons driving higher insured catastrophe losses today, but they increase vulnerability to climate change. State subsidies to coastal dwellers both increase vulnerability and contribute to climate change problems 28.686 23.407 25 19.252 20 15.982 12.938 15 Florida’s population will have doubled between 1980 and 2010, according to the US Census Bureau 9.746 10 4.952 6.789 5 0 1960 1970 1980 1990 Source: US Census Bureau; Insurance Information Institute. 2000 2010F 2020F 2030F 50 Average Square Footage of New Homes in US,1973-2008 2,500 2,300 2,100 1,900 1,700 1,660 1,695 1,645 1,700 1,720 1,755 1,760 1,740 1,720 1,710 1,725 1,780 1,785 1,825 1,905 1,995 2,035 2,080 2,075 2,095 2,095 2,100 2,095 2,120 2,150 2,190 2,223 2,266 2,324 2,320 2,330 2,349 2,434 2,469 2,521 2,519 2,700 Insurers protect homes and their owners, irrespective of the size of their carbon footprint Size of average new homes typically falls in recessions, and periods of high energy prices 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 1,500 Source: US Census Bureau: http://www.census.gov/const/C25Ann/sftotalmedavgsqft.pdf; Insurance Information Institute. 51 U.S. Residual Market Exposure to Loss (Billions of Dollars) $900 $800 $700 $600 In the 19-year period between 1990 and 2008, total exposure to loss in the residual market (FAIR & Beach/Windstorm) Plans has surged from $54.7bn in 1990 to $696.4bn in 2008. $696.4 $656.7 4 Florida Hurricanes $500 $400 $771.9 Katrina, Rita and Wilma $430.5$419.5 $372.3 Hurricane Andrew $292.0 $281.8 $244.2 $221.3 $150.0 $300 $200 $100 $54.7 $0 1990 1995 1999 2000 2001 Source: PIPSO; Insurance Information Institute 2002 2003 2004 2005 2006 2007 2008 Subsidized Insurance Increases Vulnerability to Climate Change Key Impacts of Subsidized Insurance: • Encourages/Enables Development in Vulnerable and Ecologically Sensitive Areas • Increases Vulnerability to: Elevated frequency/severity of hurricanes and other severe storms Storm surge Beach erosion Flooding due to sea level rise • Leads Directly to Increased GHG Emissions Due to Increased Development & Destruction of Carbon Sinks • Loss of coastal woodlands, wetlands and mangrove forests • Increased Risk to State’s Finances • ALSO: Subsidized Insurance Distorts Real Estate Prices • Florida’s coastal subsidies contributed to the state’s real estate bubble and therefore are partially responsible for its collapse 53 U.S. Residual Market Property Policies In-ForceExposure 3,000 2,500 In the 19-year period between 1990 and 2008, total residual market policy count (FAIR & Beach/Windstorm Plans) has nearly tripled to more than 2.6 million policies 2,000 1,785.0 1,500 1,000 2,840.4 2,780.6 2,621.3 2,209.3 2,203.9 1,741.7 1,642.3 1,458.1 1,196.5 1,319.7 931.6 Katrina, Rita and Wilma 4 Florida Hurricanes 500 0 1990 1995 1999 2000 2001 Source: PIPSO; Insurance Information Institute 2002 2003 2004 2005 2006 2007 2008 Insurance Information Institute On-Line THANK YOU FOR YOUR TIME AND YOUR ATTENTION! Download at : www.iii.org/presentations 55