ISO’s PCS Unit Estimates Insurers to Pay $3.35 Billion in First-Quarter Catastrophe Claims

JERSEY CITY, N.J., April 29, 2008 — U.S. property/casualty insurers are expected to pay homeowners and businesses an estimated $3.35 billion for first-quarter property losses resulting from nine catastrophes.

The nine events identified as catastrophes by PCS include an event PCS declared a catastrophe solely for the workers compensation loss associated with a February explosion at a sugar refinery in Georgia. This declaration is in keeping with PCS’s commitment to identify events affecting the property/casualty industry. Currently, no estimate of the extent of the insured workers compensation loss has been determined. The analysis in this press release excludes that catastrophe.

PCS estimates that the remaining eight catastrophes of first-quarter 2008 generated 615,000 claims in 22 states. Seven of these were caused by severe weather — damaging wind, large hail, flooding, and tornadoes — and one was caused by a winter storm.

“The remaining eight events still represent the greatest frequency in the first quarter since 1999 — tied with the eight events declared in 2005,” said Gary Kerney, assistant vice president, PCS. “The insured property loss, however, remains the largest in the last decade.”

Of the 22 states, the five with the largest insured property losses were Georgia ($610 million), Tennessee ($535 million), California ($360 million), Texas ($270 million), and Arkansas ($223 million).

Following is a summary of first-quarter losses and frequency since 1999:

Year

Insured Loss ($)

Frequency

1999

$1.87 billion

5

2000

$1.98 billion

7

2001

$680 million

3

2002

$615 million

3

2003

$1.48 billion

5

2004

$1.04 billion

5

2005

$2.14 billion

8

2006

$1.48 billion

7

2007

$1.26 billion

7

2008

$3.35 billion

9

The costliest event of the quarter, at $955 million, was caused by an outbreak of severe weather that spread from Texas to Ohio in early February. That catastrophe caused about 120,000 losses in the eight affected states. 

The first catastrophe of the year, a winter storm in January, affected 13 states and caused an estimated $745 million of insured property damage. It also inflicted damage to 177,000 personal and commercial properties and vehicles.

Claims in personal lines produced 56 percent of the total $3.35 billion loss for the quarter, or nearly $1.9 billion. The commercial property loss was 31 percent of the total, or just over $1 billion. The loss involving insured vehicles totaled almost $0.5 billion, or 13 percent of the total loss.

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.

About PCS
ISO’s Property Claim Services (PCS) unit serves property/casualty insurers and reinsurers as an authoritative source of catastrophe loss information, providing estimates of anticipated industrywide insured losses arising from catastrophes. The estimates reflect the total insurance payment for personal and commercial property items, business interruption, terrorism, workers compensation, and additional living expenses. The estimates exclude loss adjustment expenses.

About ISO
A leading source of information about risk, ISO provides data, analytics, and decision-support services to professionals in many fields, including insurance, finance, real estate, health services, government, human resources, and risk management. Using advanced technologies to collect, analyze, develop, and deliver information, ISO helps customers evaluate and manage risk. The company draws on vast expertise in actuarial science, insurance coverages, fire protection, fraud prevention, catastrophe and weather risk, predictive modeling, data management, economic forecasting, social and technological trends, and many other fields. To meet the needs of diverse clients, ISO employs an experienced staff of business and technical specialists, analysts, and certified professionals. In the United States and around the world, ISO helps 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