So far, this year's weather related losses have been marked by killer tornadoes, wild fires in Florida and California, flooding in the Mid-West and the first named storm of the season–not a good sign for insurers, said an industry representative.
"This sends a bit of an ominous note out that what was predicted in 2006 may in fact take place in 2007," observed Joseph J. Annotti, senior vice president of public affairs for Des Plaines, Ill.-based Property Casualty Insurers Association of America.
Noting the series of tornadoes that ripped through the Mid-West and predictions of a very active hurricane season, Mr. Annotti said these are strong indicators that insurers in 2007 may experience the heavy catastrophe losses they have feared. It could also prove that "2006 was an anomaly."
The start of the hurricane season is June 1,, but the first named storm of the year has already formed–off the Eastern coast between Georgia and Florida this week. Tropical storm Andrea was downgraded to a sub-tropical storm today.
The storm which formed off the Southeast coast on Wednesday achieved sustained winds of 45 mph, but never made landfall.
Firefighters in both Florida and California have battled major fires. It's predicted that dry conditions there show no let-up any time soon.
The Griffith Park fire in California, in Los Angeles, consumed 800 acres, according to the National Interagency Fire Center's Web site. As of today, more than 50 percent of the fire has been contained.
There was no major residential damage, said Candysse Miller of the Insurance Information Network of California, but the fire is causing grave concerns for residents in Southern California, where less than four inches of rain has fallen in the past year.
"It has been dryer than normal this year," pointed out Kate Diehl, legislative advocate with the Association of California Insurance Companies. Insurers, she noted, have been getting in touch with policyholders advising them on procedures and guidelines to reduce their exposure to wild fires.
Florida so far has reported 12 major fires, consuming more than 70,000 acres with three fires Black Creek, Dairy Road, and Bugaboo (on the Florida and Georgia border) threatening homes and structures and causing evacuations.
William Stander, a spokesman for PCI Association in Florida, said he is not aware of any residential losses connected with the fire.
Florida's Division of Emergency Management is advising residents and motorists to be cautious, as smoke from fires throughout Florida and Southeast Georgia is reducing visibility. A statewide burn ban has been issued.
Six fires in Georgia have claimed more than 195,000 acres.
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