ISO Puts 2002 P-C CAT Loss At $5.8 Billion

NU Online News Service, Feb. 13, 12:55 p.m.EST?U.S. property-casualty insurers had a relatively easycatastrophe loss experience last year and are expected to pay anestimated $5.8 billion in insured property-loss claims, InsuranceServices Office said.

The Property Claim Services unit of Jersey City, N.J.-based ISOestimated 2002 will be the fourth-lowest year for catastrophelosses in the last 10.

The full-year loss figure, ISO said, could change in the comingweeks as PCS is currently re-surveying its estimates for severalcatastrophes.

The ISO unit, it was explained, typically re-surveys catastrophelosses after it issues preliminary estimates if losses exceed $250million or specific circumstances of a catastrophe require morecomprehensive appraisal and additional analysis.

ISO said six catastrophes struck 23 states in the fourthquarter, causing an estimated $1.7 billion in losses. It's thesecond-highest loss for any fourth quarter in the last 10years.

PCS estimated that insurers received nearly 540,000 claims fromhomeowners and businesses in the quarter, which accounts for thehighest number of claims in any fourth quarter since 1998.

Catastrophe losses in 2002 were 50 percent below the 10-yearaverage for insured-property losses of $11.5 billion per year,PCS's year-end analysis found. Last year's 25 catastrophes werealso well below the 32-events-per-year average of the last 10years.

The $5.8 billion figure for insured-property losses fromcatastrophes compares with $2.6 billion in 1997, $4.6 billion in2000 and $5.6 billion in 1993.

In 2002, 40 states sustained insured-property damage fromcatastrophes. Kentucky led with $885 million in losses, followed byTexas with $630 million, Louisiana with $555 million, Maryland with$289 million, and Ohio with $275 million.

The full year recorded 25 natural disasters that produced 1.8million claims--the third highest in claims in the past fiveyears.

ISO's PCS unit defines a catastrophe as an event that causes $25million or more in insured-property losses and affects asignificant number of property-casualty policyholders andinsurers.

PCS estimates represent anticipated insured loss on anindustry-wide basis arising from catastrophes, reflecting the totalnet insurance payment for personal and commercial property lines ofinsurance covering fixed property, personal property, vehicles,boats, related property items, business interruption and additionalliving expenses. The estimates exclude loss adjustmentexpenses.

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