JERSEY CITY, N.J., July 11, 2001 — U.S. property/casualty insurers will pay homeowners and businesses an estimated $4.4 billion for insured-property losses from nine catastrophic events in the second quarter of this year — the second-worst second quarter in the last 10 years — according to estimates from Insurance Services Office, Inc.'s (ISO) Property Claim Services (PCS) unit.
The worst second quarter of the past 10 years was in 1998, when catastrophe losses totaled $4.5 billion.
This year's second-quarter losses are up threefold over the $1.4 billion in losses in the year-earlier period.
The second quarter of 2001 stands out among similar periods over the past 10 years in that two catastrophic events each caused more than $1 billion in insured-property damage — $1.2 billion from Tropical Storm Allison and $1.7 billion from the thunderstorm catastrophe that whipped 16 states from Texas to Pennsylvania.
Besides these billion-dollar events, June hailstorms pummeled North Dakota and other areas of the upper Midwest along with Colorado. Together, those two events added $415 million to the quarter's catastrophe losses.
Catastrophe losses for the first six months of 2001 now stand at $5.1 billion, the fourth-costliest six-month period since 1992. Losses in the corresponding period last year totaled $3.4 billion.
While producing near-record losses for a second quarter in the last 10 years, the second quarter of 2001 tied the second quarter of 1997 for the fewest number of catastrophes — nine.
For the quarter this year, insurers received 1.03 million claims from businesses and homeowners, compared with 550,000 claims in the year-ago period. The highest number of second-quarter claims filed with insurers was 1.7 million in 1998.
Of the 21 affected states, Texas incurred the greatest insured-property losses with $1.4 billion, followed by Missouri at $1.25 billion; Nebraska at $400 million; Minnesota at $355 million; and North Dakota at $160 million.
Following is a recap of second-quarter catastrophe activities in the U.S. since 1996:
|$4.5 billion||1.7 million|
|$3.5 billion||1.4 million|
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.