Remember last winter? It was a cold one.
In fact, according to Munich Re, the first quarter of 2014 ranked as the coldest winter in the Eastern U.S. in more than a decade. There were 11 winter storms and cold waves between January and March of this year, causing 84 fatalities and an estimated $2.4 billion in insured losses. The Polar Vortex event alone caused nearly $1.7 billion in insured losses, according to Property Claims Service for Verisk Insurance Solutions.
And if the last couple of weeks are any indication (have you seen the photos from Buffalo yet?), we could be on track for more of the same. For insurers, that could get expensive, totaling as much as $2.5 billion, according to the Insurance Information Institute's (I.I.I.) estimates.
“Severe winter weather is the third-largest cause of insured catastrophe losses, after hurricanes and tornadoes,” said Dr. Robert Hartwig, president of the I.I.I. “Losses from snow, ice, freezing and related causes averaged $1.2 billion annually over the past twenty years. This year insured losses from severe winter events will be at least double that amount, likely exceeding $2.5 billion by year’s end, making 2014 the fourth costliest year on record for winter storm losses."
According to the I.I.I., winter storm claims accounted for 6.4% of all insured catastrophe losses between 1994 and 2013, just behind hurricanes and tropical storms (41%) and tornadoes (36%) among the costliest natural disasters. In 2013, winter losses totaled $1.8 billion.
Add in the spike in auto claims that typically accompanies the onset of winter, along with workers' compensation claims due to winter-related slip-and-fall incidents, and it's easy to see the potential costs add up for insurers.