Delaware senators hear primer on insurance, reinsurance and mitigation from Griffith Foundation

The Senate Banking, Business, Insurance and Technology Committee met March 12 and heard a nonpartisan briefing from the Griffith Insurance Education Foundation and Dr. David Kooser of East Carolina University on how insurance markets function, the role of investment and reinsurance income in insurer solvency, and options for mitigation and regulation.

The presentation, given to a committee that did not consider any bills at the hearing, emphasized that insurance supports economic activity, that property and casualty carriers have relied on investment returns to offset underwriting losses, and that global catastrophe losses and reinsurance costs are driving higher premiums and reduced market participation.

Dr. David Kooser, associate professor of risk management and insurance, opened with a broad description of the industry’s economic role. “Insurance is the grease for the economic wheels, in any kind of developed economy,” Kooser said, explaining how insurers both indemnify losses and invest large pools of premium dollars back into bonds, mortgages and equities. Kooser cited industry figures showing combined ratios above 100 in recent years, meaning insurers paid more in losses and expenses than they collected in premiums before investment income.

The briefing…