U.S. P/C Insurers’ Catastrophe Losses for Q2 Double to $6 Billion; Average Claim $5K

U.S. property/casualty insurers are expected to pay homeowners and businesses an estimated $6.025 billion for second quarter property losses resulting from a total of 16 catastrophes in 27 states, which is nearly double the number of catastrophes in the first quarter.

The insured property damage in the second quarter almost doubled the losses incurred in the first, according to preliminary analysis by Insurance Service Office’s Property Claim Services unit.

PCS estimates the 16 catastrophes of second-quarter 2008 generated 1,223,500 claims that averaged nearly $5,000 each.

At $1.08 billion, Texas topped the list of the five most severely affected states for the second quarter, followed by Minnesota at $810 million, Kansas at $578 million, Arkansas at $450 million, and Oklahoma at $425 million.

The costliest event of the quarter — caused by the effects of severe weather — occurred in May and affected seven states from Colorado and Wyoming to Minnesota. The current PCS estimate
of insured property damage for this event is $850 million.

U.S. insurers are expected to pay about $3.35 billion for first-quarter property losses resulting from nine catastrophes.

Insured losses for the second quarter last year totaled about $2.3 billion from six catastrophic events, according to PCS.

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. The estimates reflect the total insurance payment for personal and commercial property items, business interruption, terrorism, workers compensation, and additional living expenses. The estimates exclude loss adjustment expenses.

Source: ISO

Latest Comments

• July 23, 2008 at 12:13 pm

  Pud ? says:

  Well I am sick and tired of people saying insurance premium increases are justified.IF YOU did your research then YOU would be able to recite the same! It's obvious all you ar... read more
• July 23, 2008 at 7:12 am

  Pud ? says:

  Pud, you have too much time on your hand to write such lengthy comments. One can only hope you put similar effort into your work.
• July 22, 2008 at 6:33 am

  Pud says:

  If they are like most of the mid to smaller insurers I don;t think any of them know what they are doing? They hire kids out of college that know nothing about claims and the c... read more