An executive with Property Claim Services said the company is considering a revision to include an offshore element in its calculation of U.S. catastrophe losses.
The e-mailed comments from Gary Kerney, assistant vice president of PCS, came after he was asked about the size of recent insured loss estimates the company produced for Hurricane Ike.
PCS, a unit of Jersey City, N.J.-based Insurance Services Office, in December 2008 released an updated estimate for insured property damage in all Ike-hit states of $10.655 billion. Swiss Re estimated the loss as $20 billion and Munich Re calculated it at $30 billion.
Mr. Kerney noted that PCS estimates "do not include offshore losses and PCS cannot speculate on how such losses may impact current estimates."
This week Guy Carpenter insurance brokerage noted that a number of insurers have recently revised their Hurricane Ike loss estimates upward anywhere from 50 to 60 percent and more increases may be expected.
Mr. Kerney wrote, "Today, offshore property is a specialty insurance program, and many insurers do not participate in that market." But he said, "PCS is evaluating an eventual inclusion of this property in catastrophe estimates."
"Historically," he explained, "PCS has focused on insured property damage for inland personal and commercial properties and vehicles. When the catastrophe identification process began, there was no focus on any offshore items that may have been in place then."
In October of last year executives at AIR Worldwide catastrophe modeling firm said one reason for widely varying estimates for Ike losses was the uniqueness of that hurricane, which after weakening had re-gathered strength and caused more damage when it joined with another dangerous weather system after being downgraded from hurricane status.
When it lost its hurricane strength category many firms had left off tracking it, it was explained.
AIR said that after 2005 it had added a component to models to account for offshore energy operations damage, and executives said hurricanes can often do underwater damage to energy platforms that it can be difficult and slow to get a handle on.
Hurricane Ike, in September 2008, after buffeting Texas and Louisiana, had been petering out and the National Hurricane Center had left off tracking it. Ike then moved north and teamed up with an extra tropical cyclone in Ohio, and the two re-energized and battered that state with winds from 60 mph to 70 mph.
Also hit by the same storm combo were parts of Arkansas, Indiana, Illinois, Kentucky, Missouri, Pennsylvania, New York, Tennessee and West Virginia.
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