U.S. property/casualty insurers will pay $1.4 billion to homeowners and businesses for insured property losses from 10 catastrophic events in the second quarter of this year, according to initial estimates from the Property Claim Services (PCS) unit of Insurance Services Office Inc.
That compares with $3.5 billion in insured catastrophe losses from 13 events in the second quarter of 1999. In the past 10 years, the worst second quarter for catastrophe losses was in 1998, when losses hit $45 billion primarily because of hail in Minnesota. The lowest second-quarter catastrophe loss, $980 million, occurred in 1997. For the quarter this year, insurers received about 550,000 claims for personal and commercial property losses and automobile losses. Spring flooding, hail, tornadoes and wind in 24 states caused the bulk of the second-quarter insured damage.
Texas led all states in second-quarter catastrophe losses with $205 million, followed by South Carolina with $165 million and Pennsylvania and Illinois with $115 million each. The second-quarter catastrophe losses of $1.4 billion bring the industry’s total insured catastrophe-loss estimate through June 30 to $3.1 billion. First-quarter catastrophe claims totaled $1.7 billion caused principally by Texas tornadoes.
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 property/casualty insurers and policyholders. The PCS estimate represents anticipated insured loss on an industry-wide basis arising from catastrophes, reflecting the total net insurance payment for personal and commercial property lines of insurance covering fixed property, personal property, vehicles, boats, related property items, business interruption and additional living expenses. The estimates exclude loss-adjustment expenses.
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