In 2013, PCS® designated 29 catastrophe events in the United States, making the year slightly above average despite the relatively low insured catastrophe loss total. The team designated 6 events in Canada. However, we examined more than those 35 events.
PCS reviews as many as 50 events per year in the United States and Canada, monitoring them in their early stages to see whether they’re likely to become catastrophe events. We do that because it’s crucial that we designate a catastrophe as early as possible. Insurers across North America rely on PCS catastrophe serial numbers to track claims effectively, and they use the data to benchmark average claims paid, identify and deploy necessary resources, and manage loss adjustment expenses (LAE).
When we begin to monitor an event to see if it will become a catastrophe, we consider a number of factors, including whether:
- it’s likely to cause at least $25 million in insured losses
- it will affect a significant number of insureds
- it will affect a significant number of insurers
Those criteria help us separate widespread events from those with limited reach. For example, a wildland fire event in some parts of California could cause more than $25 million in damage but affect only a handful of homes.
To learn more about PCS catastrophe designation, download everything you need to know about the PCS Catastrophe Loss Index now.