Despite Sandy, NPR’s Planet Money, which is made in New York, had a brief podcast on Friday. After The Flood, The Backup Plan examined the different ways in which the US economy speeds recovery after natural disasters. ((But not, interestingly enough, after financial disaster, a point raised by the podcast but not actually dealt with.)) One of those ways is insurance and, even more so, reinsurance.
Those are the guys who insure the insurers, and while the insurance business as a whole is certainly aware of the impact of climate change on their business model, one J. Eric Smith, CEO of Swiss Re Americas, was at pains to point out that their reserves are plenty big enough to pony up for at least a couple of big natural disasters simultaneously. That’s reassuring.
When asked who insures the re-insurers, Smith was forthright:
We’re insured by diversification.
Just sayin’.