Twenty-three catastrophes in 2007 added up to a total loss for U.S. property-casualty insurers of $6.5 billion–one of the lowest years on record, said Property Claims Services.
The unit of the Jersey City, N.J.-based Insurance Services Office (ISO) said it was the eighth-lowest cost in a decade and the seventh-lowest frequency for the same period, according to a preliminary analysis.
PCS said it estimates that insurers paid 1.18 million claims for damage in 41 states resulting from 23 events that qualify as catastrophes by causing $25 million or more in insured losses and affecting a significant number of policyholders and insurers.
The company said more than 721,000 personal lines claims accounted for $4.4 billion, while 144,000 commercial lines claims cost an estimated $1.3 billion and 315,000 vehicle claims cost insurers an estimated $800 million.
The 23 catastrophes consisted of 17 severe weather events (wind, hail, tornadoes and flooding), five winter storms and one wildfire.
Among the 41 states experiencing insured losses from catastrophes, 11 had losses of $200 million or more. The five hardest hit were: California, $1.23 billion; Minnesota, $747 million; Texas, $677 million; Georgia, $320 million; and Illinois, $272 million.
The costliest events to insurers, PCS reported, were due to severe weather that resulted in $1.35 billion of insured damage from Texas to Maine and the Witch Fire in San Diego County, Calif., which caused an estimated $1.1 billion in losses.
Gary Kerney, assistant vice president, PCS, noted: "For the second year in a row, the United States dodged a devastating hurricane. With the exception of Humberto, which made landfall in southeast Texas and southwest Louisiana in September, no other hurricane made landfall on U.S. territory in 2007."
He added, "Catastrophes continue to occur and cause insured property damage that may not adversely affect the financial condition of most insurers but does cause hardship to hundreds of thousands of policyholders."
PCS estimated that in the fourth quarter of last year insurers paid $1.7 billion of insured property loss resulting from four catastrophes between October and December 2007–the fourth-costliest fourth quarter in the last decade.
The four catastrophes caused insured damage in nine states and a total of 159,000 claims. Hardest-hit states in the period were: California, $1.2 billion; Oklahoma, $188 million; Washington, $95 million; Oregon, $70 million; and Missouri, $57.5 million.
ISO's PCS unit defines a catastrophe as an event that causes $25 million or more in insured property losses and affects a significant number of policyholders and insurers.
PCS serves property-casualty insurers and reinsurers as an authoritative source of catastrophe loss information, providing estimates of anticipated industrywide insured losses arising from catastrophes. The estimates reflect the total insurance payment for personal and commercial property items, business interruption, terrorism, workers' compensation, and additional living expenses. The estimates exclude loss adjustment expenses.
ISO provides data, analytics and decision-support services to insurers and other industries.
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