Insurers to Pay $6.5 Billion in 2007 Catastrophe Claims, Says ISO’s
Property Claim Services Unit
JERSEY CITY, N.J., January
14, 2008 — U.S. property/casualty insurers are expected to pay homeowners and
businesses $6.5 billion for 2007 property losses from 23 catastrophes — the
eighth lowest cost in a decade and the seventh lowest frequency for the same
period, according to preliminary analysis by ISO’s Property Claim Services
Unit.
PCS estimates that insurers
paid 1.18 million claims for damage in 41 states resulting from 2007’s 23
catastrophes. More than 721,000 personal lines claims accounted for $4.4
billion, while 144,000 commercial lines claims cost an estimated $1.3 billion,
and 315,000 vehicle claims cost insurers an estimated $800 million.
The 23 catastrophes
consisted of 17 severe weather events (wind, hail, tornadoes, and flooding),
five winter storms, and one wildland fire.
Among the 41 states
experiencing insured losses from catastrophes, following are the states with
the largest losses:
State Loss
($)
The costliest events to
insurers in 2007 were severe weather that resulted in $1.35 billion of insured
damage from
“For the second year in a
row, the
Fourth quarter 2007
PCS estimates that insurers
paid $1.7 billion of insured property loss resulting from four catastrophes
between October and December 2007 — the fourth costliest fourth-quarter in the
last decade.
The four catastrophes
caused insured damage in nine states and a total of 159,000 claims. Following
are the states with the largest insured losses in the fourth quarter:
State Loss
($)
Following is the breakdown
of fourth-quarter catastrophe activity during the past decade:
Year Insured Loss
($)
Frequency
1998
$480 million 3
1999 $265 million
2
2000 $815 million
4
2001 $485 million
4
2002 $1.73 billion
6
2003 $2.6 billion
5
2004 $450 million
3
2005 $10.8 billion
5
2006 $1.5 billion
6
2007 $1.7 billion
4
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.
About PCS
ISO’s Property
Claim Services (PCS) unit serves property/casualty insurers and reinsurers as an authoritative source of catastrophe loss
information, providing estimates of anticipated industrywide
insured losses arising from catastrophes. The estimates reflect the total
insurance payment for personal and commercial property items, business
interruption, terrorism, workers compensation, and additional living expenses.
The estimates exclude loss adjustment expenses.
About ISO
A leading source of
information about risk, ISO provides data, analytics, and decision-support
services to professionals in many fields, including insurance, finance, real
estate, health services, government, human resources,
and risk management. Using advanced technologies to collect, analyze, develop,
and deliver information, ISO helps customers evaluate and manage risk. The
company draws on vast expertise in actuarial science, insurance coverages, fire protection, fraud prevention, catastrophe
and weather risk, predictive modeling, data management, economic forecasting,
social and technological trends, and many other fields. To meet the needs of
diverse clients, ISO employs an experienced staff of business and technical
specialists, analysts, and certified professionals. In the