While expected to rise over the coming weeks and months, property and auto insurance claims related to the May 19 and 20 tornadoes in Oklahoma have reached 22,422, representing insured losses of at least $85 million, according to the Oklahoma Insurance Department (OID).
The May 19 severe weather that hit Oklahoma, and the EF-5 tornado that hit the town of Moore, Oklahoma on May 20 was an anomaly in that the 2013 U.S. severe thunderstorm and tornado season had been off to a slow start, according to A.M. Best’s report "Briefing: U.S. Property/Casualty. Oklahoma Tornado Ends Modest Cat Activity, Highlights Exposure Management." The rating agency says the tornado followed a similar path to a 1999 Moore tornado that produced the highest wind speeds ever recorded and caused an estimated $2.8 billion of damage, of which $1.4 billion was insured.
Initial reports from the scene indicate that damage from the 2013 storm could be more extensive than that from the 1999 tornado, with significant destruction of homes, automobiles and some commercial properties, according to A.M. Best.
Many also believe that losses are likely to exceed the latest $2.2 billion loss estimate from the May 2011 Joplin, Mo., EF-5 tornado, which is the current largest tornado loss ever for insurers.
According to the A.M. Best report, larger, national insurers with exposure to Oklahoma are well capitalized to absorb the financial impact of this type of event. “However, smaller, individual, regional companies may be impacted negatively, depending on where they write and their degree of risk concentration relative to the ultimate path of the storm,” the report states. “It is important to note that over the past several years, catastrophe risk management efforts have been underway to address these types of losses. In particular, companies have implemented exposure management initiatives, percentage deductibles and pricing changes.”
