Insurers' 2002 Catastrophe Losses at $5.8 Billion, Fourth-Lowest Year in 10 Years; Fourth-Quarter Tab $1.7 Billion, Estimates ISO's PCS Unit

JERSEY CITY, NJ, Feb. 13, 2003 — U.S. property/casualty insurers are expected to pay an estimated $5.8 billion in insured property-loss claims from catastrophes last year, making 2002 the fourth-lowest year in losses in the last 10, according to preliminary estimates by Insurance Services Office, Inc.'s (ISO) Property Claim Services (PCS) unit.

The full-year loss figure could change in the coming weeks as PCS is currently re-surveying its estimates for several catastrophes. The ISO unit typically resurveys catastrophe losses after it issues preliminary estimates if losses exceed $250 million or specific circumstances of a catastrophe require more comprehensive appraisal and additional analysis.

Six catastrophes struck 23 states in the fourth quarter, causing an estimated $1.7 billion in losses — the second-highest loss for any fourth quarter in the last 10 years. PCS estimates that insurers received nearly 540,000 claims from homeowners and businesses in the quarter, which accounts for the highest number of claims in any fourth quarter since 1998.

Catastrophe losses in 2002 were 50 percent below the 10-year average for insured-property losses of $11.5 billion per year, PCS's year-end analysis shows. Last year's 25 catastrophes were also well below the 32-events-per-year average of the last 10 years.

Insured-property losses from catastrophes were the lowest in 1997 at $2.6 billion, followed by $4.6 billion in 2000 and $5.6 billion in 1993.

In 2002, 40 states sustained insured-property damage from catastrophes. Kentucky led with $885 million in losses, followed by Texas with $630 million, Louisiana with $555 million, Maryland with $289 million, and Ohio with $275 million.

The full year recorded 25 natural disasters that produced 1.8 million claims — the third highest in claims in the past five years.

Following is a recap of U.S. insured losses from catastrophes since 1993:

Year
Total Number of Events
Losses ($)
No. of Claims
1993
36
$ 5.62 billion
1.2 million
1994
38
$17.01 billion
2.5 million
1995
34
$ 8.32 billion
2.7 million
1996
41
$ 7.37 billion
3.9 million
1997
25
$ 2.6 billion
1.6 million
1998
37
$10.07 billion
3.5 million
1999
27
$ 8.34 billion
3.3 million
2000
24
$ 4.6 billion
1.4 million
2001
20
$28.1 billion
1.6 million
2002
25
$ 5.8 billion
1.8 million

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.

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, business interruption and additional living expenses. The estimates exclude loss-adjustment expenses.

ISO is a leading source of information, products and services related to property and liability risk. For a broad spectrum of commercial and personal lines of insurance, ISO provides analytical and decision-support products, consulting, technical services, statistical services and data processing. ISO's products help customers with sales and prospecting, underwriting, rating and quoting, customer management, policy administration, product development, claims administration and fraud detection. Through its iiX and Intellicorp subsidiaries, ISO also provides motor vehicle reports, police reports and criminal-records information. Through its AIR Worldwide subsidiary, ISO helps customers with reinsurance analysis and assessment of the risk of natural and man-made catastrophes. In the United States and around the world, ISO serves insurers, reinsurers, agents, brokers, self-insureds, risk managers, insurance regulators and other government agencies.

Release: Immediate

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

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