Insurers Pay $8.2 Billion in 1999 Catastrophe Claims Making Last Year Fifth Worst in Half a Century

NEW YORK, Jan. 18, 2000 – U.S. property/casualty insurers will pay $8.2 billion to homeowners and businesses for insured property losses from 27 catastrophic events in 1999, according to estimates from Insurance Services Office, Inc.'s (ISO) Property Claim Services (PCS) unit.

That compares with $10 billion in catastrophe losses from 37 events in 1998, and $22.9 billion from 36 losses in 1992, the record for total catastrophe losses in a year.

Last year ranks as the fifth worst for catastrophe losses since 1949, when catastrophe-record keeping began, while the year's 3.3 million catastrophe claims are the third most posted in a single year – exceeded only by 1996, with 3.9 million claims and 1998 with 3.5 million.

The industry's 1999 catastrophe loss total was only mildly affected by fourth-quarter catastrophe losses of $265 million from two events – Hurricane Irene, which caused $100 million of insured losses in Florida only, and Hurricane Lenny, which cost insurers $165 million in Puerto Rico and the U.S. Virgin Islands.

Last year's fourth-quarter catastrophe losses are nearly 50 percent lower than the $480 million in catastrophe losses for the year-ago period.

Following is a table of the ten states that suffered the highest catastrophe losses in 1999:

STATE AMOUNT PRINCIPAL CAUSES
1. Oklahoma $1.1 billion May tornadoes
2. North Carolina $928 million Hurricanes Dennis & Floyd
3. Texas $515 million Severe weather
4. Virginia $485 million Hurricanes Dennis & Floyd
6. Michigan $375 million Severe weather
6. Ohio $375 million Severe weather
7. Arkansas $325 million Severe weather
8. Pennsylvania $255 million Hurricane Floyd
9. New York $230 million Severe weather
10. Florida $222 million Hurricanes Floyd & Irene

Last year was the first year in a quarter of a century that California did not suffer a single catastrophe, while Florida, which has incurred the greatest insured catastrophe losses in this decade, was only tenth, despite the active hurricane season.

The top ten states for catastrophe losses in the last decade, 1990 through 1999, are:

STATE AMOUNT  
1. Florida $19.3 billion Hurricane Andrew (1992), $16.5 billion
2. California $17.5 billion Northridge Quake (1994), $14 billion
3. Texas $ 6.6 billion  
4. North Carolina $ 3.4 billion  
5. Oklahoma $ 2.6 billion  
6. New York $ 2.4 billion  
7. Minnesota $ 2.3 billion Hailstorms (1998), $1.2 billion
8. Kansas $ 2.0 billion  
10. Illinois $ 1.7 billion  
10. Colorado $ 1.7 billion  
 

Last year's total of 27 catastrophes was the second-lowest in the decade, but hurricane activity was higher than average with 12 named storms in which winds exceeded 39 miles per hour. Of these, eight were hurricanes, five of them intense hurricanes of category three or greater intensity.

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 property/casualty policyholders and insurers.

The PCS estimate represents anticipated insured loss on an industrywide basis arising from catastrophes, reflecting the total net 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.

Release: Immediate

Contacts:
Giuseppe Barone / Erica Helton
MWW Group (for ISO)
201-507-9500
gbarone@mww.com / ehelton@mww.com