JERSEY CITY, N.J., May 20, 2003 — U.S. property/casualty insurers are expected to pay policyholders an estimated $1.55 billion for insured property-loss claims from severe thunderstorms and killer tornadoes that cut a wide swath through 18 states May 2–11, according to a preliminary estimate by Insurance Services Office, Inc.'s (ISO) Property Claim Services (PCS) unit.
PCS estimates insurers will receive more than 429,000 claims from auto, residential and commercial policyholders affected by hail, wind, flooding and more than 400 tornadoes.
Estimated insured losses from this windstorm event make it the third highest in history. The highest insured loss in a windstorm catastrophe was $2.2 billion in April 2001 that affected 16 states, followed by a $1.7 billion loss from a 17-state event in April 2002.
Tennessee sustained the highest insured losses — $310 million from an estimated 77,000 claims.
Following is the breakdown for the next six hardest-hit states:
|North Carolina||$75 million||
The PCS estimate is based on a survey of at least 70 percent of insurers writing residential, commercial and automobile policies in the affected states.
"We will review our initial loss estimate in the next 60 days, which could change the dollar figures and the claim count," said Gary Kerney, PCS assistant vice president. "PCS typically resurveys catastrophe losses after it issues a preliminary estimate if losses exceed $250 million or specific circumstances of a catastrophic event require a more comprehensive appraisal and additional analysis," Kerney added.
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 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. Life and health insurance claims are not included in the estimate.
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 data, analytical and decision-support products; consulting; data processing; and technical, statistical and actuarial services. ISO field services include on-site rating and underwriting services and the evaluation of community loss-mitigation efforts. ISO's products help customers with sales and prospecting, underwriting, rating and quoting, customer management, policy administration, product development, claims administration and fraud detection. ISO's AIR Worldwide subsidiary provides technologies to assess and manage natural and man-made extreme-event risk. Through its ISO Claims Services, Inc. (iiX unit) and Intellicorp subsidiaries, ISO provides motor vehicle reports and criminal-records information and through its AscendantOne unit delivers policy-management and rating solutions. In the United States and around the world, ISO serves insurers, reinsurers, agents, brokers, self-insureds, risk managers, insurance regulators and other government agencies.