ISO’s PCS Unit Announces First Quarter Catastrophe Losses in Conjunction with Opening of Catastrophe Conference —

Insurers Estimated to Pay $1.22 Billion for Q1 Cat Losses

 

JERSEY CITY, N.J., April 25, 2007 — Severe tornadoes in several southern states helped push catastrophe losses to more than $1.2 billion during the first quarter of 2007, according to ISO’s Property Claim Services (PCS) unit. PCS released a preliminary analysis in advance of its upcoming catastrophe conference.

U.S. property/casualty insurers are expected to pay an estimated $1.22 billion to homeowners and businesses in insured property losses from seven catastrophe events in first-quarter 2007, PCS reported.

PCS also estimated that the four winter storms and three severe weather events produced nearly 204,000 claims in 18 states from California to Florida during the period. 

The quarter’s costliest event occurred in early March, when tornadoes raked areas of Alabama and Georgia. While the damage from this harsh weather outbreak cost insurers more than $450 million, a more serious impact was the loss of life associated with the severe tornado activity in areas such as Enterprise, Alabama, and Americus, Georgia. 

Of the 18 states, the five with the largest insured property losses were Georgia ($285 million), Alabama ($175 million), Texas ($167 million), Missouri ($140 million), and Florida ($100 million).

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

                                Year      Insured Loss ($)     Frequency

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    1.48 billion    7      
                       
2007    1.22 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. Estimates reflect 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.

The unpredictable world of catastrophes
To help property/casualty insurers better prepare and plan for catastrophe events, ISO’s PCS unit is hosting its 2007 PCS Catastrophe Conference in Phoenix, Arizona, April 29 to May 2.  

Keynote speaker Dr. Robert P. Hartwig, president and chief economist of the Insurance Information Institute, and other prominent industry experts will explore the preparation and response planning for catastrophes of increasing intensity, frequency, and loss potential. Among many timely industry topics, this year’s discussions will include:

    • issues surrounding expected hurricane activity in the years ahead
    • the earthquake threat in California and the New Madrid region
    • proposals for preparedness and response to U.S. disasters
    • a look back at Katrina

 

Throughout the conference, catastrophe experts will discuss a variety of topics in depth, while sharing their own experiences and offering practical solutions. The conference is targeted to professionals in claims, underwriting, actuarial, research and development, and loss control and includes interactive sessions to exchange views with industry experts.

For more information, visit http://www.iso.com/conferences/pcs/.

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
ISO is a leading provider of products and services that help measure, manage, and reduce risk. ISO provides data, analytics, and decision-support solutions to professionals in many fields, including insurance, finance, real estate, health services, government, and human resources. Professionals use ISO’s databases and services to classify and evaluate a variety of risks and detect potential fraud. In the United States and around the world, ISO’s services help customers protect people, property, and financial assets.