U.S. property/casualty insurers are expected to pay homeowners and businesses an estimated $1.65 billion for insured property-loss claims from six catastrophes affecting 23 states in the second quarter, according to preliminary estimates by ISO’s Property Claim Services (PCS) unit.
This compares with insured losses of $5.1 billion in second-quarter 2003 and $2.8 billion in second-quarter 2002. The property/casualty industry posted its worst second quarter for catastrophe losses in 2001, with a record $6.2 billion in insured damage.
Catastrophe losses for the first half of this year now stand at $2.69 billion – the second lowest for insured losses during the past decade. The six-month period ended June 30 is also the second lowest in the decade for the number of catastrophic events – 11.
PCS estimates the six catastrophes in the quarter are expected to generate nearly 495,000 claims, of which more than 270,000 are from homeowners.
Severe weather, including high winds, hail, tornadoes, heavy rains and flooding, caused the insured damage associated with all six events.
At $295 million, Colorado topped the list of the most severely affected states, followed by Texas at $280 million, Oklahoma at $140 million, Missouri at $115 million and Illinois at $110 million.
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 policyholders and insurers. PCS estimates represent anticipated insured loss on an industrywide 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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