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.”

Featured Video

Most Recent Videos

Video Library ››

Top Story

Top 10 personal auto carriers for 2016, as ranked by NAIC

Which personal auto carriers saw their market share decrease? Which personal auto carriers saw their direct premiums written go up? NAIC has them all ranked.

Top Story

3 wise cybersecurity solutions for 2017

Human error is the leading cause of cybercrimes. Businesses may be missing out by not training their own employees in cybersecurity.

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.