The first quarter’s six catastrophes incurred $2.2 billion in insured losses
As reported by Verisk’s Property Claim Services® (PCS®), catastrophe activity in the first quarter of 2014 was slightly below average. PCS designated six catastrophe events, amounting to $2.2 billion in insured losses in the United States. Unsurprisingly, five of the six were winter storm events, including the “polar vortex,” which occurred in January. The polar vortex was responsible for the vast majority of the quarter’s catastrophe losses — more than $1.5 billion across 17 states. The 2014 results are slightly below the ten-year average (2005 to 2014): seven events and approximately $2.5 billion.
This year’s first quarter was the quietest since 2011, in which seven events caused approximately $2.2 billion in catastrophe losses. It was followed in 2012 by the most severe first quarter of the past decade, in which six catastrophe events led to $3.6 billion in losses.
First-quarter 2014 catastrophe activity affected 19 states, with Georgia sustaining the greatest losses ($318 million). New York and Pennsylvania followed, with $296 million and $219 million, respectively. Georgia was also among the top states in the first quarter of 2013, with catastrophe losses of $640 million. The most affected state of the first quarter of 2013 was Mississippi, with $805 million.
Personal property losses accounted for 75 percent of first-quarter activity ($1.7 billion), followed by commercial property losses at 23 percent and vehicle losses at 2 percent. Seventy-three percent of polar vortex losses came from personal property, with 26.7 percent from commercial property and 0.3 percent from auto.
In Canada, the first quarter was catastrophe-free for the second year in a row. Catastrophe 25, a winter storm designation from December 22 through December 26, 2013, was the last catastrophe designated for Canada, with nearly 28,000 claims and with approximately $194.1 million in losses.
This is the third first quarter in a row in which no catastrophes occurred in Canada. In 2009, 2010, and 2011, only one catastrophe event occurred in each first quarter.
First-quarter activity tends to account for a small portion of U.S. and Canadian catastrophe losses. The second quarter, already upon us, brings with it the start of hurricane season, the annual gauntlet that can pose the greatest threat to catastrophe team contingency plans. The months that follow will show whether the quiet 2013 season ushered in a false sense of security.