MYTH: The federal government should insure natural catastrophes because the private insurance market does not have the financial resources to cover disasters such as Hurricane Katrina.

REALITY: The private insurance industry has insured wind and earthquake risks, including the unprecedented losses of the 2005 hurricane season.

• Of the top 10 most costly world insurance losses from 1970-2005, three are 2005 natural catastrophes (Hurricanes Katrina, Rita and Wilma) that occurred in the U.S. (more...)
• Although reinsurers have paid more than 60% of all the losses from Hurricanes Katrina, Rita and Wilma, the capital markets greatly enhanced reinsurance catastrophe capacity following these catastrophes. (more...)
• Reinsurers, utilizing their global resources, play an essential role in the U.S. economy and help protect America by spreading the risk and impact of natural disasters among different market segments. (more...)
• History proves the private sector has insured catastrophic natural disasters and, if market dynamics are allowed to work, has plentiful capacity to do so in the future. (more...)