NEW YORK, January 12, 1999 — Despite below average fourth-quarter catastrophe losses, U.S. property/casualty insurers posted catastrophe losses estimated at $10.07 billion last year, making it the third-worst year for catastrophe losses in the last 10 years, according to Insurance Services Office, Inc.'s (ISO) Property Claim Services (PCS) unit.
Fourth-quarter 1998 catastrophe losses totaled an estimated $480 million from three catastrophic events — nearly double the $250 million from the same number of events in the year-ago period — but still lower than the 10-year average of $1.152 billion. The industry's worst fourth-quarter catastrophe losses in the last 10 years totaled $2.63 billion from five events in 1995.
According to ISO's PCS unit, catastrophe losses in 1998 were nearly four times higher than the $2.6 billion in 1997. In severity of insured property damage, 1998 is surpassed only by the $22.97-billion loss in 1992 — the year of Hurricanes Andrew and Iniki — and the $17.01-billion loss in 1994 when the Northridge earthquake hit California.
The 1998 $10.07 billion price tag includes revised PCS estimates for higher losses from two particularly severe catastrophic events: Hurricane Georges in the third quarter and storms and tornadoes in Minnesota in the second quarter. Hurricane Georges' toll was $2.9 billion, up $400 million from the initial estimate of $2.5 billion, while Minnesota losses reached $1.3 billion.
For full-year 1998, catastrophe loss and number of events by quarter were as follows:
Quarters | Catastrophe Loss ($) | Number of Events |
First quarter | $ 1.005 billion | 10 |
Second quarter | $ 4.520 billion | 16 |
Third quarter | $ 4.065 billion | 8 |
Fourth quarter | $ .480 million | 3 |
TOTAL
|
$10.070 billion
|
37 |
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 and casualty policyholders and insurers.
The PCS estimate represents anticipated insured loss on an industry-wide basis arising from catastrophes, reflecting the total net 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. The estimates exclude loss-adjustment expenses.
Release: Immediate
Contacts:
Giuseppe Barone / Erica Helton
MWW Group (for ISO)
201-507-9500
gbarone@mww.com / ehelton@mww.com