Insurers Third-Quarter Catastrophe Losses Reach $675 Million, Estimates ISO's Property Claim Services Unit

JERSEY CITY, NJ, Oct. 23, 2002 — Insurers are expected to pay $675 million to homeowners and businesses for insured-property losses from six catastrophic events in the third quarter of this year, according to preliminary estimates by the Insurance Services Office, Inc.'s (ISO) Property Claim Services (PCS) unit. This brings catastrophe losses to $3.7 billion for the first nine months of 2002.

Six events in 18 states ranging from Arizona to New York generated nearly 260,000 claims for damage to personal and commercial property and motor vehicles, ISO said.

Indiana topped the list for insured-property damage ($150 million), followed by Wyoming ($98 million), Louisiana ($95 million), Arizona ($75 million) and Virginia ($50 million).

Catastrophe losses in the quarter were relatively low because there were fewer tornadoes as recorded by the National Weather Service — 196 compared with 273 last year, 247 in 2000 and 237 in 1999.

Three catastrophes struck in September, making it the costliest month for insured losses at $380 million. Two separate windstorm events in Arizona and Utah and in the Ohio Valley (Indiana, Kentucky and Ohio) caused $215 million in insured damage. Tropical Storm Isidore rounded out the month when heavy rain and winds caused $165 million in insured losses in Louisiana, Mississippi, Alabama and Florida.

Following is a recap of third-quarter catastrophe losses since 1992:

Year
Frequency
Insured Losses ($)
Number of Claims
1992
8
$17.4 billion
1,048,000        
1993
11
$755 million
125,000        
1994
11
$630 million
248,000        
1995
7
$1.56 billion
325,000        
1996
8
$2.22 billion
930,000        
1997
5
$510 million
342,000        
1998
8
$4.06 billion
1,198,000        
1999
7
$2.71 billion
831,000        
2000
3
$315 million
100,150        
2001
4
$20.7 billion
150,000        

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 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 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

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