Supplying insurance for natural disasters: a retrospective study of property insurer strategies

Natural disasters have always challenged property insurers due to their fundamental nature and unpredictability. The challenge continues despite significant improvements in catastrophe modelling, growing opportunities for data analytics, and an increasing number of alternative risk transfer opportunities. We provide an overview of the fundamental issues that affect insurability of natural disaster events and identify factors associated with property insurers' willingness to provide coverage in the face of increasing frequency and severity of natural disaster events. Using data for the period 1984-2019, we explore insurer characteristics and other factors associated with insurers' participation in state insurance markets. Our analysis considers intervening causes of changes in the supply of coverage including underwriting performance, natural disaster events, and diversification. Our evaluation facilitates a better understanding of insurer supply responses that may inform efforts to ensure the availability of coverage for insurance consumers.