NEW YORK, Oct. 6, 1999 – Insurance companies will pay $2.1 billion for claims resulting from seven natural disasters in the third quarter, according to estimates by Insurance Services Office, Inc.'s (ISO) Property Claim Services (PCS) unit.
That amount covers 831,000 claims from homeowners, businesses and auto owners who were victims of severe storms, including Hurricane Floyd, which caused an estimated $1.3 billion in insured losses.
The third quarter's catastrophe losses this year were the fifth-highest for a third quarter since catastrophe record keeping began 50 years ago. The worst third quarter for insured catastrophe losses was in 1992, when insurers picked up the tab for 1 million claims totaling $17.4 billion in damage, due mostly to Hurricane Andrew, mainly in Florida.
With more than half the normal hurricane season over, eight storms have developed already – from Arlene to Harvey. Four of the eight made landfall and three of those were designated catastrophes.
ISO's PCS unit defines a catastrophe as an event within a particular territory that causes $25 million or more in insured property losses and affects a significant number of property and casualty policyholders and insurers.
PCS estimates represent anticipated insured loss on an industry-wide basis arising from catastrophes, reflecting the total net insurance payment for personal and commercial property insurance covering fixed property, personal property, vehicles, boats, related property items and business interruption losses. The estimates do not cover losses due to flooding or loss adjustment expenses.
Third-quarter losses bring to $7.4 billion total catastrophe losses for 1999. The industry's first-quarter catastrophe losses totaled $1.9 billion, and second-quarter losses were $3.5 billion.
The most costly catastrophe of 1999 was a series of tornadoes and tropical storms that barreled through Oklahoma and 17 other states in early May, causing $1.5 billion in insured property damage.