In Chinese astrology, the year 2012 was the Year of the Dragon, a symbol of unpredictability and uncertainty. The dragon represents mystery because its head and tail cannot be seen at the same time, according to Chinese tradition.

So was the Year of the Dragon marked by mystery for the U.S. property/casualty insurance industry? Perhaps no more than any other year for an industry that is affected by both the weather and politics.  The past year had its share of surprises, political as well as meteorological. But in terms of insurance markets and the economy in 2012, there was no great surprise, although there was frustration. By year’s end it was clear the dragon’s tail was a lot like the head —not what people had hoped for.

Every year has its ins and outs and ups and downs. Here is a recap of the insurance ins and outs and ups and downs of the Year of the Dragon 2012:

1. Roberts Rules

In what many thought a surprise, the Supreme Court said that Obamacare and the individual mandate were in keeping with the Constitution, which left employers trying to figure out what to do next and states having to decide whether to be in charge of their own health exchanges. A majority of states opted out, leaving the job up to the federal government. While health exchanges – and in some circles, Chief Justice Roberts– wentout of favor, accountable care organizations came into vogue and interest in consumer-driven health plans shot up.

2. Super Losses

The year started out with a lot of inclement weather in the Midwest and the South but then settled down. Then Hurricane Isaac’s downpour hit Louisiana and the Gulf states and Superstorm Sandy tore up the Atlantic seaboard. By the time 2012 was up, it was in the record books as one of the deadliest and costliest storm seasons. Sandy was downgraded from a hurricane, leading to a bit of an uproar over deductibles. Fortunately, private insurers and reinsurers were in a financial position to handle the losses without going out of business.

3. Hard-to-Define Market

Expectations for a traditional hard market were out. Many price-sensitive commercial insurance buyers were down as insurers drove up commercial insurance rates over the course of the year. Interest rates and investment income remained down so tighter underwriting was in favor.

4. Wet ‘n Dry

The flood insurance program was in and out before it was downsized and reformed. Then Sandy threatened to take it down to its last dollar. Meanwhile it was a year of record drought that threatened to wipe out crop insurers’ profits. Up and down the coasts, worries over property exposures continued to keep many up at night.

5. Day at the Breach

The risk of data breaches and cyber crimes continued to go up. Small business owners played down the need for cyber insurance. But risk professionals appeared to be more ontop of the issue.

Read More: Source

Posted 4:22 PM

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