How do insurance companies survive through major disasters?

Question

Some natural disasters devastate huge amounts of property and assets costing huge amounts of money that I would assume policy holders would want to claim. Maybe I am naive to the huge amounts of profit that insurance companies make, but how do they survive financially?

In: Economics

Answer 1

Lloyd’s of London, for instance, does a lot of insurance for insurance companies. It protects the insurance companies in the unlikely catastrophic instances where even their reserves won’t cover it.

Berkshire Hathaway is another huge reinsurer