Filed Under:Claims, Catastrophe & Restoration

S&P: Industry to Weather Early 2012 Tornado Outbreaks

NU Online News Service, March 19, 3:05 p.m. EDT

Although 2012 tornado activity is well above the year-to-date average for 2005-2011, Standard & Poor’s says the insurance and reinsurance industries should be able to sustain the losses. 

More than 150 tornadoes have wreaked havoc in several U.S. states between Feb. 28 and March 3.

In its March 15 Global Credit Portal, S&P says, “Insurance and reinsurance companies have barely caught their breath after sustaining more than $100 billion in catastrophe losses from 2011 global events, and they are already assessing this year's damage from catastrophes.”

However, the ratings agency adds that while the local impact from recent tornadoes is severe, the industry should be able to manage the losses. S&P says losses for the February-March outbreak could hit $2 billion, far less than an April-May outbreak in 2011 that saw $20 billion in insured losses from tornadoes and severe storms.

S&P notes that a “stark contrast” between the 2011 and 2012 outbreaks is that the 2012 tornadoes occurred in less densely populated locations with lower property values.

The ratings agency says it does not expect the February-March tornadoes to trigger any of its rated catastrophe bonds, and adds that the storms are likely to have a larger impact on regional carriers.

Recently, executives at several regional insurers discussed how they are involved in the communities affected by storm seasons, and have—albeit unfortunately—had practice in dealing with local disasters.

S&P notes that peak tornado activity usually occurs later in the year than it did in 2012, generally beginning in the spring. But S&P adds, “Extrapolating this year's early activity as indicative of a highly active 2012 may be premature.”

Top Story

What does TRIA denial mean for workers’ compensation?

What does the denial of a TRIA renewal mean to the workers’ compensation industry?

Top Story

Shock, dismay and disappointment: P&C insurance industry's reaction to TRIA news

The U.S. Senate adjourned for the year on Dec. 15 without passing the Terrorism Risk Insurance Program Reauthorization Act.

More Resources

Comments

eNewsletter Sign Up

Claims Connection eNewsletter

Breaking news on disasters, fraud, legal trends, technology, and CE initiatives for the P&C claim professional – FREE. Sign Up Now!

Mobile Phone
         

Advertisement. Closing in 15 seconds.