Insurers to Pay $11.5 Billion in Q3 Catastrophe Claims

U.S. property/casualty insurers are expected to pay homeowners and businesses an estimated $11.5 billion for third-quarter property losses resulting from a total of 11 catastrophes in 22 states — the fourth-largest insured property loss in a third quarter since 1998, according to preliminary analysis by ISO’s Property Claim Services (PCS) unit.

PCS estimates the 11 catastrophes of third-quarter 2008 generated 1.7 million claims. Of the 11 catastrophes, six were caused by severe weather (wind, hail, tornadoes, and flooding) and five were caused by tropical systems.

The 22 affected states ranged from New Mexico to North Dakota to Virginia. Presently, the five states with the greatest insured losses are Texas ($6.4 billion), Louisiana ($1.9 billion), Ohio ($1.2 billion), Kentucky ($0.4 billion), and Illinois ($0.37 billion).

“These figures show that tropical systems can reach well inland and inflict extensive property damage — a fact that is often overlooked,” said Gary Kerney, assistant vice president, PCS. “Although the current estimates of insured property damage are not record-setting, the frequency of events continues a trend that has occurred all year: a high number of events coupled with significant insured losses.”

Through the first three quarters of 2008, PCS has declared 36 catastrophes. Those catastrophes have caused an estimated $22.1 billion of insured property damage and resulted in approximately 3.7 million claims. An estimated 2.5 million personal lines claims accounted for $14.5 billion of property damage, while 356,000 commercial lines claims cost an estimated $5.4 billion, and 840,000 vehicle claims cost insurers $2.2 billion.

ISO’s PCS unit defines a catastrophe as an event that causes $25 million or more in insured property losses and affects a significant number of policyholders and insurers. All estimates are subject to change as PCS continues to monitor loss reports from insurers.

Source: ISO’s Property Claim Services