NEW YORK, July 13, 1998 —The U.S. property/casualty insurance industry will pay a second-quarter record of $3.4 billion to policyholders for losses from catastrophes, according to the Property Claim Services (PCS) unit of Insurance Services Office, Inc. (ISO). Combined with $1.0 billion in catastrophe losses in the first quarter, the industry will pay a total of $4.4 billion for catastrophe losses for the first half of 1998.
This year's second-quarter insured catastrophe losses increased dramatically from the year-ago period, when such losses were a comparatively mild $980 million. Until this year, the highest second-quarter catastrophe-loss total was $3.37 billion in 1992.
The $4.4 billion total in first-half catastrophe losses is the highest for the period since 1994, when the Northridge, Calif., earthquake helped to push the first-half total to $15.6 billion.
Second-quarter losses this year resulted from 16 catastrophes that generated an estimated 1.3 million commercial property, homeowners and auto insurance claims. For the first half, the catastrophe count is 26, the greatest number of catastrophes for the period since 1982.
PCS defines a catastrophe as an event within a particular territory that causes $25 million or more in insured property losses and affects a significant number of property and casualty policyholders and insurers.
The most expensive catastrophe of this year's second quarter was $650 million incurred in three days of severe windstorms, hail and tornadoes that ripped across 12 states from Minnesota to Vermont, generating 250,000 claims between May 30 and June 1.
The heaviest catastrophe losses so far this year have been in Minnesota, where storms and tornadoes caused an estimated $635 million in insured property damage. Tennessee posted six catastrophes in the first half, but ranks a distant second in insured property loss at $270 million.
Estimates by ISO's PCS unit represent 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 and business-interruption losses. The estimates exclude loss-adjustment expenses.
Insurance Services Office, Inc. provides information about the property/casualty industry, including statistical information, actuarial analyses, policy language, claim services and related services. ISO's customers include more than 2,900 insurers and reinsurers, as well as agents, brokers, regulators and risk managers.
Release: Immediate
Contacts:
Giuseppe Barone / Erica Helton
MWW Group (for ISO)
201-507-9500
gbarone@mww.com / ehelton@mww.com