ISO's Property Claim Services Unit Estimates Insurers to Pay $971 Million in Third-Quarter Property Losses

JERSEY CITY, N.J., November 2, 2006 — U.S. property/casualty insurers are expected to pay homeowners and businesses an estimated $971 million for third-quarter property losses resulting from a total of seven catastrophes in 20 states — the third lowest record among third quarters in the past 10 years, according to preliminary analysis by ISO’s Property Claim Services (PCS) unit.

That compares with insured losses of $48 billion in third-quarter 2005 — the property/casualty industry’s worst third quarter for catastrophe losses — and $24 billion in third-quarter 2004.

PCS estimates the seven catastrophes of third-quarter 2006 generated nearly 280,000 claims.

The costliest event of the period was an outbreak of severe weather across the upper Midwest that caused $280 million of insured property damage in four states. The second costliest event — and the only tropical cyclone — was Tropical Storm Ernesto, which caused an estimated $245 million in insured property damage.

At $200 million, Minnesota topped the list of the five most severely affected states, followed by Missouri at $113 million, Illinois at $112 million, New York at $76 million and New Jersey at $70 million.

Following is a summary of third-quarter losses and frequency of events since 1998:

Year

Loss ($)

Frequency

1998

$4 billion

8

1999

$2.7 billion

7

2000

$315 million

3

2001

$19 billion

4

2002

$715 million

6

2003

$3.7 billion

7

2004

$24 billion

8

2005

$48 billion

7

2006

$971 million

7

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 business covering fixed property, personal property, vehicles, boats, related property items, business interruption and additional living expenses. The estimates exclude loss adjustment expenses. 

About ISO
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Release: Immediate

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