Insurers Expected to Pay $1.38B for Q1 Cat Losses

U.S. property/casualty insurers are expected to pay an estimated $1.38 billion to homeowners and businesses in insured property losses from seven catastrophe events in first-quarter 2006, according to preliminary analysis by ISO’s Property Claim Services (PCS) unit.

PCS estimates that the seven catastrophes produced nearly 390,000 claims in 19 states. Personal lines claims accounted for 53 percent of the total, 12 percent for commercial lines claims and 35 percent for auto claims. The large number of vehicle claims stemmed from hail and tornado damage.

The quarter’s costliest event was an outbreak of severe weather across six Midwest states from Kansas to Indiana. The insured damage from the event is slightly more than $800 million and the claims count is in excess of 222,000.

Missouri suffered the largest insured loss, estimated at $475 million, in the quarter, followed by Kansas at $113 million, Arkansas at $108 million, New York at $103 million and Illinois at $100 million.

Three winter storms and four wind and thunderstorm events constitute the quarter’s seven catastrophes — slightly above the average of six events during the past decade. Since 1997, 25 winter storm catastrophes in the first quarter have caused over $6 billion of insured property damage, PCS said. During the same period, severe weather outbreaks — wind, hail, tornadoes and flooding — produced 35 catastrophe events with $6.5 billion in estimated insured property damage.

Following is the breakdown of first-quarter catastrophe activity during the past decade:

Year — Insured Loss (No. of Events)
1997 — $860 million (8)
1998 — $1.00 billion (10)
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 — $1.38 billion (7)

Source: ISO’s PCS