Preliminary Estimate Puts Insured Losses from Hurricane Katrina at $34.4 Billion: ISO Property Claim Services

JERSEY CITY, N.J., Oct. 4, 2005 — Hurricane Katrina is expected to cost U.S. property/casualty insurers an estimated $34.4 billion in insured property losses, making it the costliest U.S. catastrophe ever, according to preliminary estimates by ISO's Property Claim Services (PCS) unit.

Katrina caused widespread damage to homes and businesses in six states — Louisiana, Mississippi, Alabama, Florida, Tennessee and Georgia. New Orleans bore the brunt of the hurricane's fury as rising flood waters and wind wreaked havoc on the city.

Policyholders in the affected states are expected to file more than 1.6 million claims for damage to personal and commercial property, automobiles, and boats and yachts.

At an inflation-adjusted $20.8 billion, Hurricane Andrew in 1992 was the costliest catastrophe in the U.S. until now.

Following is the breakdown of insured property damage and claims count:

State Losses ($) No. of Claims
Louisiana
Mississippi
Alabama
Florida
Tennessee
Georgia
22.6 billion
9.8 billion
1.3 billion
468 million
46.1 million
22.2 million
900,000
490,000
123,000
110,000
8,400
3,300

The personal property loss claims include nearly 75,000 boats and yachts in the affected states, with an estimated insured value of slightly under $2 billion.

Insurers are still assessing individual losses and analyzing various scenarios that will affect ultimate claim payments, according to PCS. Handling claims from this wide-ranging devastating event has been difficult for several reasons, including limited access to damaged areas, difficulty in tracking down property owners who evacuated to other locations and breakdown of the communication infrastructure.

PCS will resurvey insurers in 60 days as more claims are filed and existing claims are closed. PCS resurveys are standard procedure for all catastrophes that exceed $250 million in insured losses or whenever specific circumstances require additional analysis.

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 policyholders and insurers.

PCS estimates represent anticipated insured loss on an industrywide basis arising from catastrophes, reflecting the total 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. Not included in the PCS estimate are losses to utilities, agriculture, aircraft, ocean marine (including oil drilling platforms) and property insured under the federal flood insurance program. The estimates exclude loss adjustment expenses.

About ISO
ISO is a leading provider of products and services that help measure, manage and reduce risk. ISO provides data, analytics and decision-support solutions to professionals in many fields, including insurance, finance, real estate, health services, government and human resources. Clients use ISO's databases and services to classify and evaluate a variety of risks and detect potential fraud. In the U.S. and around the world, ISO's services help customers protect people, property and financial assets.

Release: Immediate

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

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