As the damages from yesterday’s magnitude 5.8 earthquake are tallied, the insurance industry seems to have gotten off rather lightly. The extent of losses from this year's hurricane season, however, remain to be seen.
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Nonetheless, the shaking which prompted building evacuations in Washington D.C. and New York City as was felt was felt as far away as Montreal, Canada. Additionally, the quake triggered the shutdown of two nuclear reactors and delayed some flights and train services in the region.
While the losses are in no way nominal, by way of comparison, the 1994 Northridge earthquake cost the industry roughly $15 billion in insured losses. However, add the losses from yesterday’s quake on top of the litany of losses the industry has already suffered this year and a different picture emerges.
A.M. Best Co. estimates that catastrophe-related losses experienced by the U.S. property/casualty industry in the first half of 2011 have already exceeded the losses for all of 2010. Today the company released figures pegging catastrophe-related losses at $27 billion in the first half of 2011, compared with an estimated $19.6 billion for 2010.
Worse still, insurers still have to wait out what is expected to be an above-average hurricane season. Presently, Hurricane Irene has been upgraded to Category 3 and is battering the southern Bahamas with sustained winds of 115 mph. According to catastrophe modeling firm