Preliminary analysis by ISO’s Property Claim Services Unit (PCS) reveals that U.S. property/casualty insurers are expected to pay homeowners and businesses $25.2 billion for 2008 property losses from 37 catastrophes—the fourth-highest cost and highest frequency in a decade.
Insurers paid 3.9 million claims for damage in 40 states as a result of 37 catastrophes in 2008, PCS estimates. ISO says more than 2.7 million personal lines claims accounted for 64% of the $25.2 billion loss, while 340,000 commercial lines claims accounted for 27% of the total loss and 876,000 vehicle losses accounted for 9%.
Hurricanes, severe weather, winter storms and tropical storms comprised the 37 catastrophes in 2008, with hurricanes causing the largest loss, currently estimated at $13.3 billion in insured damage. Severe weather events—those producing damaging winds, large hail, tornadoes and flooding—caused an estimated $10.5 billion in losses, whereas winter storms resulted in more than $1 billion in losses and two tropical storms cost insurers $300 million.
Texas ($10.2 billion) was first among the 40 states experiencing insured losses from catastrophes in 2008, followed by Louisiana ($2.2 billion), Minnesota ($1.6 billion), Ohio ($1.3 billion) and Georgia ($1.0 billion).
“There are several extraordinary characteristics of the 2008 catastrophes,” says Gary Kerney, AVP, PCS. “Foremost are the six consecutive tropical systems that made landfall on U.S. coastlines. Unusually frequent tornado touch-downs and related insured property damage contributed to record-setting frequency and significant losses in the first six months of 2008. All of this activity was followed by a very quiet fourth quarter in which PCS declared only one catastrophe—a winter storm in mid-December.”
ISO goes on to note that the 37 catastrophes—any event that causes $25 million or more in insured property losses and affects a significant number of policyholders and insurers—in 2008 are the highest frequency in a decade, tying the number of catastrophes in 1998.
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