March 1, 2001 by Canadian Underwriter
The insured cost of catastrophic losses for 2000 in the U.S. fell below the past 10-year average to a low of US$4.3 billion, according to the Insurance Services Office (ISO). Last year’s cat loss in value terms was 53% below the 10-year average for insured property losses of US$9.1 billion a year.
The ISO reports 24 natural disasters for last year, from which 1.4 million claims were submitted. The losses in question arose from 35 states with Texas in the lead with US$1.2 billion from six events. The other top three states showing losses include Louisiana with US$523 million, South Carolina with US$204 million, and Pennsylvania with US$175 million. Insurers barely experienced any hurricane related losses last year, according to the ISO, with no strong storms having made landfall.
On the Canadian cat front, a survey of insurance executives in Ontario and Quebec carried out by Lloyd’s of London suggests that the vast majority of respondents believe that the cost of cat events will increase in coming years. The survey identifies flooding, ice storms and windstorms as the top three risks facing the two provinces. Around 60% of Quebec-based insurance executives also see earthquakes as a serious threat to the province. Respondents in Ontario felt that ice storms were the biggest future threat.
And, on a global scale, a report released by Swiss Reinsurance Co. suggests that total cat losses (insured and uninsured) rose sharply last year to an estimated US$38 billion and resulted in approximately 17,000 lost lives. The cost to insurers globally amounted to about US$11 billion which is seen to be relatively low based on recent years of experience which culminated in 1999’s record-breaking US$31 billion insured loss.