Throughout time, insurance providers have paid out enormous amounts of money to policy-holders for instances such as loss of life, heavy damages to buildings, corporate failures and natural disasters. We wanted to delve in deeper to find out what the biggest insurance claim payouts of all time were.
The Lehman Brothers – $100 billion
The Lehman Brothers were the United States’ fourth largest investment bank behind Goldman Sachs, Morgan Stanley and Merrill Lynch before declaring bankruptcy in 2008. Payouts were rife after the bank declared bankruptcy; paying the creditors, taxpayers and those that have had money invested in the bank.
Hurricane Katrina, Rita & Wilma – $130 billion
Records show that 2005 Atlantic hurricane season was the most active season recorded in history, seeing storms with winds up to 185mph and a total of 28 storms altogether – with 15 hurricanes and 3,913 fatalities. The cost of the damage caused was around $158.9 billion, with approximately $130 billion paid out as insurance. $45 billion of which was paid out for damage caused by Hurricane Katrina alone.
2008 Financial Crisis – $21 trillion
The 2008 financial crisis is seen as the worst financial crisis since the Great Depression, causing a global economic downturn and recession across the country. Massive bail-outs were rolled out to protect financial institutes and policies were triggered to prevent a collapse of the financial system. The financial crisis showed that many insurance providers had a lack of adequate capital holdings to back the financial commitments they were making. AIG, for example, the world’s largest insurer, nearly went bankrupt after collateralised debt obligations it had during the crisis. Other providers had to freeze paying out money after fearing that they’ll end up with not enough to cover their own obligations.