Insurers Paid $27.3B For 04 Cats

Insurers Paid $27.3B For 04 Cats

U.S. property-casualty insurers, after 22 catastrophic events last year, paid a record $27.3 billion for insured property losses to homeowners and businesses, Property Claim Services estimated.

PCS, a unit of Insurance Services Office in Jersey City, N.J., said the loss figure surpassed 2001, which included the Sept. 11 terrorist attack.

Over 80 percent of the 2004 insured losses were from the five hurricanes that made landfall in the United States along the Atlantic and Gulf coasts. PCS said the last time back-to-back hurricanes struck the United States was in 1999, the year of hurricanes Bret, Dennis, Floyd, Irene and Lenny.

In 2004, PCS said Florida suffered the highest insured losses at $18.8 billion, all from the four third-quarter hurricanes Charley, Frances, Ivan and Jeanne followed by Alabama at $1.8 billion, Colorado and Pennsylvania each at $715 million, and Georgia at $660 million.

ISO's PCS unit defines a catastrophe as an event within a particular territory that causes at least $25 million in insured property losses and affects a significant number of p-c policyholders and insurers. Loss estimates exclude loss adjustment expenses.

Catastrophic activity was mild in the fourth quarter with insured losses of $450 million from three events. Fourth-quarter 2003 was the worst fourth quarter for insurers with $2.64 billion in insured losses, mostly from two wildfires in Southern California.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, February 11, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.