INSURERS EXPECTED TO PAY HOMEOWNERS AND BUSINESSES $1.38 BILLION FOR Q1 CATASTROPHE LOSSES, SAYS ISO’S PROPERTY CLAIM SERVICES

JERSEY CITY, N.J., April 20 — U.S. property/casualty insurers are expected to pay an estimated $1.38 billion to homeowners and businesses in insured property losses from seven catastrophe events in first-quarter 2006, according to preliminary analysis by ISO’s Property Claim Services (PCS) unit.

PCS also estimates that the catastrophes produced nearly 390,000 claims in 19 states. Personal lines claims accounted for 53 percent of the total, 12 percent for commercial lines claims and 35 percent for auto claims. The large number of vehicle claims stemmed from hail and tornado damage.

The quarter’s costliest event was an outbreak of severe weather across six states from Kansas to Indiana. The insured damage from the event is slightly more than $800 million and the claims count is in excess of 222,000.

Missouri suffered the largest insured loss, estimated at $475 million, in the quarter, followed by Kansas at $113 million, Arkansas at $108 million, New York at $103 million and Illinois at $100 million.

Three winter storms and four wind and thunderstorm events constitute the quarter’s seven catastrophes — slightly above the average of six events during the past decade. Since 1997, 25 winter storm catastrophes in the first quarter have caused over $6 billion of insured property damage, PCS said. During the same period, severe weather outbreaks — wind, hail, tornadoes and flooding — produced 35 catastrophe events with $6.5 billion in estimated insured property damage. 

            Following is the breakdown of first-quarter catastrophe activity during the past decade:

Year                            Insured Loss ($)                    No. of Events

1997                                        $ 860 million                            8

1998                                        $1.00 billion                             10

1999                                        $1.87 billion                             5

2000                                        $1.98 billion                             7

2001                                        $ 680 million                            3

2002                                        $ 615 million                            3

2003                                        $1.48 billion                             5

2004                                        $1.04 billion                             5

2005                                        $2.14 billion                             8

2006                                        $1.38 billion                             7         

ISO’S PCS unit defines a catastrophe as an event that causes $25 million or more in insured property losses and affects a significant number of policyholders and insurers. 

PCS estimates represent anticipated insured loss on an industrywide basis arising from catastrophes, reflecting the total insurance payment for personal and commercial property lines of insurance covering fixed property, personal property, vehicles, boats, related property items, business interruption and additional living expenses. The estimates exclude loss adjustment expenses.

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