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U.S. insurers paid out US$2.9 billion in winter-related insured losses in 2015: Insurance Information Institute


January 22, 2016   by Canadian Underwriter


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Insurers in the United States paid out an estimated US$2.9 billion in winter-related insured losses in 2015 but remain well-positioned financially to weather the significant storm expected to strike the east coast of the U.S. this weekend, the Insurance Information Institute (I.I.I.) said earlier this week.

Between 1995 and 2014, winter storm claims accounted for 6.8% of all insured U.S. catastrophe losses

“Insured losses caused by severe winter weather are on the rise,” said Dr. Robert Hartwig, and economist and president of the I.I.I., noting that both 2014 and 2015 were well above what the insurance industry has typically experienced at this time of year. The US$2.9 billion in losses for 2015 were up sharply – 26% – from US$2.3 billion in losses in 2014 and up US$1 billion – or 53% – from US$1.9 billion in 2013, the I.I.I. said in statement.

“Despite the sharp escalation in winter storm losses in recent years, insurers entered 2016 with near-record claims paying capital on hand and are financially prepared for anything Mother Nature has in store,” added Hartwig. [click image below to enlarge]

Insured annual U.S. winter storm losses in 2014 totalled US$2.3 billion in 2014

Auto claims also tend to spike during the winter months, due to slick roads. “This was particularly true during the past two frigid years,” Dr. Hartwig said. “In 2014, collision claim frequency rose 8.5% from a year earlier. In 2015, collision claim frequency stayed high – 7.3% higher than in 2013.” [click image below to enlarge]

At 6.8% of all insured U.S. cat losses between 1995 and 2014, winter storm claims placed third behind hurricanes and tropical storms (40.8%) and tornadoes (39.1%)

Damage caused by slippery road conditions are covered under standard auto insurance policies in the U.S.; standard homeowners and business policies cover damage caused by wind, snow, severe cold and freezing rain.

Between 1995 and 2014, winter storm claims accounted for 6.8% of all insured U.S. catastrophe losses, placing the category third behind hurricanes and tropical storms (40.8%) and tornadoes (39.1%) as the costliest natural disasters, according to Verisk’s Property Claim Services.