Japan and the US Insurance Marketplace

I was asked today if I thought the disaster in Japan would have an impact on the US business insurance marketplace.

Not even a noticeable ripple.

A US disaster costing several billion dollars would have an impact.

A more likely cause of a change from buyer’s market to seller’s market would be a dramatic increase in the demand for insurance coverage or a drop in the capacity of insurers.

Supply and demand – simple economics. Right now there is lower demand (due to the economic decline) while capacity (supply) is at unprecedented levels.