Allison's Toll Rises to $2.5 Billion, Up $1.3 Billion from Original Estimate in July, ISO Resurvey of Insurers' Losses Shows

JERSEY CITY, N.J., Aug. 30, 2001 —Insurers are expected to pay $2.5 billion to Tropical Storm Allison's victims, according to revised estimates of insured-property losses by Insurance Services Office, Inc.'s (ISO) Property Claim Services (PCS) unit.

The revised estimate, following a resurvey of insurers, is up $1.3 billion, more than double PCS's original July estimate of $1.2 billion. Most of the increased loss was caused by a more-than-100 percent increase in Texas losses, which swelled to $2.2 billion from $1 billion.

ISO's PCS unit resurveys catastrophe losses about 60 days after issuing preliminary estimates if losses exceed $250 million or specific circumstances relating to a catastrophe require additional analysis. PCS resurveyed insurers because extensive flooding — resulting from heavy rain unleashed by Tropical Storm Allison, largely in the Houston area — prevented a more comprehensive assessment of insured damage when the initial report was issued.

Besides Texas, Tropical Storm Allison ravaged Pennsylvania, Louisiana, New Jersey, Florida and Mississippi. Insured losses in Pennsylvania were also revised upwards to $215 million from $120 million reported in July.

The ISO unit also revised its original insured-loss estimates to $1.9 billion from $1.7 billion for the April 6-12 thunderstorm catastrophe that whipped 16 states from Texas to Pennsylvania. In ISO's resurvey, Missouri's insured losses increased $155 million to $1.39 billion, mostly from hailstone damage to vehicles and roofs in St. Louis and vicinity.

The resurvey also reported a spike in the total number of claims in the 16 states to 326,800 from 280,300.

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.

The ISO loss analysis does not include flood losses that are covered by the federal National Flood Insurance Program.

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 lines of insurance covering fixed property, personal property, vehicles, boats, related property items, and business-interruption losses. 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