Severe Winter to Squeeze the Earnings of Property Insurers

Harsh weather conditions cause property damages and financial losses. For Americans, this year's winter was one of the worst in recent memory. In fact, winter storms brought many parts of the country to a standstill. Administrators had a tough time keeping the roads clear for vehicles and pedestrians during the winter season. In fact, officials across the country are still paying the bills.

In Atlanta, the cleanup costs amounted to $13.5 million. The situation was even worse in many other parts of the country.

Severe winter also hurt property insurer's earnings during the first quarter. In fact, this year's winter was probably one of the costliest in the country since 1980. Insured losses during the period were more than 1.5 billion USD.

Besides causing major property losses, the adverse winter affected several businesses. Many companies had to deal with supply chain issues and business disruptions. If you add sinkholes, train derailments and mudslides, it is not hard to see that the first quarter loss is above average.

Winter isn't the only cause of property damage in the US. The Atlantic hurricane season is even more dangerous. Although weather forecasters expect this year's hurricane season to be less active, you never know until the storms hit the shore.

Several independent studies note that property insurer's net income during this quarter is likely to be challenged. However, since the market for securities is strong, they should be able to sail through.

This year's severe weather upset business operations for several companies throughout the country. Severe weather conditions pose a continuous threat to the bottom lines of many businesses in the US.

FM Global, unarguably one of the biggest business property insurers in the world, recently conducted a poll of the workforce in the US. Over 70% of the full-time workers in the US said that this year's winter was the worst they had experienced in five years. More than 25% employees said that their company had been hit by the weather. Unfortunately, most of them didn't have any emergency plans to continue their operation during the hostile weather conditions.

However, winter-related financial losses have caused many companies to rethink their strategies and change the way they do business. That is a welcome move because the weather is quite unpredictable and hence companies should avoid complacency.

Harsh winter can cause property damage and financial loss. It may also affect the organization's competitiveness. Businesses need to be resilient and should be able to deal with all weather-related emergencies.

Businesses can prevent property damage in winter by following these guidelines.

·         Don't expect the winter to be lenient. You should plan as though freeze-ups are going to be certain. This is imperative even if your company headquarters is located in a warmer climate where severe drops in temperatures are unlikely.

·         Every company should have some employees to patrol buildings during the winter season. They should look for cold spots, large leaks and structural damages.

·         If the operations need to be shut down, there should still be procedures for adequate heating. This is imperative. If the company fails to heat the premises adequately, they will not be able to claim damages from their insurance companies.

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