Insurers' Third-Quarter Catastrophe Losses Total $315 Million, Lowest in 11 Years, Estimates Insurance Services Office

NEW YORK, Oct. 17, 2000 — U.S. property/casualty insurers will pay homeowners and businesses $315 million for insured catastrophe losses — the lowest third-quarter amount in 11 years beginning 1990, estimates Insurance Services Office, Inc.'s (ISO) Property Claim Services (PCS) unit.

For the first nine months of the 11 years beginning 1990, this year ranks eighth in total losses, ninth in number of claims and last in number of catastrophes.

The current quarter's $315 million in losses from three catastrophic events compare with $2.72 billion in losses from seven events in third-quarter 1999. The highest-ever third-quarter catastrophe losses were in 1992, when Hurricanes Andrew, Iniki and six other events caused $17.4 billion in insured property damage from more than 1 million claims.

The three catastrophic events in the third quarter affected 12 states, primarily in the Midwest. The worst catastrophe loss was $150 million from a thunderstorm-related event in the upper Midwest in early July.

Five states sustained most of the losses in the quarter: Minnesota - $105 million; Wisconsin - $50 million; Ohio - $45 million; Michigan - $40 million; and Illinois - $16 million.

Insurers' catastrophe losses through the first nine months of this year totaled $3.48 billion, down from $8.06 billion in nine-months 1999, and $9.59 billion in the corresponding 1998 period.

For the first nine months of this year, insurers received more than 1.2 million personal and commercial property, and auto damage claims. That compares with 2.4 million claims — twice as many — in the year-earlier period.

The following is a recap of third-quarter catastrophic activities since 1990:

Year
Total
Catastrophic
Events
Total
Losses ($)
No.
of Claims
2000
3
$315 million 100,150
1999
7
$2.72 billion 831,000
1998
8
$4.07 billion 1,198,000
1997
5
$510 million 342,000
1996
8
$2.22 billion 930,000
1995
7
$1.56 billion 325,000
1994
11
$630 million 248,000
1993
11
$755 million 125,000
1992
8
$17.43 billion 1,048,000
1991
2
$695 million 489,000
1990
7
$860 million 229,000

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