Property Claim Services declares two cat events in Canada in Q1 2016

Property Claim Services (PCS) declared two catastrophe events in Canada in the first quarter of 2016, the first time the company has designated a first-quarter event in the country since 2011.

The first event, a winter storm, is still under review, with a preliminary estimate of $25 million, PCS said in its PCS Q1 2016 Catastrophe Review, released on Wednesday. The winter storm affected Ontario, New Brunswick and Quebec. Freezing rain, snow and strong winds caused numerous power outages across southern Quebec, eastern Ontario and southern New Brunswick beginning late on Feb. 24 and continuing through the early morning of the next day.

The second event, another winter storm, hit Ontario in late March, bringing flooding, freezing rain, heavy ice accumulation and high winds, PCS said in the report. The preliminary estimate for the event is $40 million, with a resurvey result scheduled to be published in 60 days.

In the United States, the first quarter of 2016 was the worst first quarter in a decade in terms of catastrophe frequency and severity, the report noted. U.S. cat activity in the quarter reached US$3.8 billion. Total insured losses edged higher from US$3.6 billion in the first quarter of 2015, with the number of PCS-designated events growing by more than 40%. “We did see a continuation of trend of increased catastrophe event frequency, with the number of first quarter events far above the ten-year average,” the report said.

Related: March storm in Ontario tops $25 million in insured damage: CatIQ estimate

PCS designated 13 cat events in Q1 in the U.S., with the expectation that the total could rise as two late-quarter events are still being investigated. Those results exceeded the 10-year average (2007 to 2016) of US$3 billion in losses and are considerably above the 7.6 events per first quarter, PCS said.

The report noted that the first quarter of 2007 was quite calm with US$1.3 billion in catastrophe losses. Industry-wide insured losses for more than half of the first quarters of the past decade were at least US$3 billion, four of them topping US$3.5 billion (2008, 2012, 2015, and 2016). “Winter storm, hail, and wind events may usually be small, but they can cause significant losses,” the report noted. [click image below to enlarge]

One standout winter storm in February 2015 affected 20 states and caused US$2.1 billion in losses. The largest event of the first quarter of 2016 affected Texas and resulted in losses of US$1.1 billion. In 2014, the polar vortex was responsible for the bulk of first-quarter losses, accounting for more than US$1.5 billion across 16 states.

This year, the report said, 29 states were affected by first-quarter cat activity. Texas was the hardest-hit state of the year, with five events resulting in insured losses of nearly US$1.9 billion. California was next with four events causing US$240 million in losses, followed by Illinois (two events causing US$210 million in losses), Louisiana (four events causing US$200 million in losses), and New York (three events causing US$150 million in losses).

In Q1 2016, personal losses accounted for 69% of U.S. first-quarter activity (nearly US$2.7 billion), followed by auto losses at 21% and commercial losses at 11%. Last year, first quarter personal losses accounted for 71% of first-quarter activity, followed by commercial at 25% and vehicle at 4%.