November 1, 2002 by Canadian Underwriter
U.S. insurers will likely pay about US$675 million in catastrophic claims for the third quarter of this year, according to the Insurance Services Office Inc. (ISO). Cat costs for the first nine months of this year amount to US$3.7 billion.
Losses for the latest quarterly reporting period stem from six events that generated about 260,000 claims from 18 states. Indiana topped the list as the most costliest at US$150 million, followed by Wyoming at US$98 million, Louisiana at US$95 million, Arizona at US$75 million and Virginia at US$50 million. The ISO notes that cat losses for the third quarter were relatively minor in comparison with past years as there were fewer tornadoes. This year saw 196 tornadoes while last year produced about 273 events, with 2000 showing 247, and 1999 at 237.
September proved the most costly for insurers, with losses totaling US$380 million from three cat events. These were two windstorms that struck Arizona, Utah and the Ohio Valley, causing about US$215 million in insured damage. Tropical storm Isidore produced an insured loss of US$165 million, mostly through wind and rain damage spread across Louisiana, Mississippi, Alabama and Florida. The ISO reports that Hurricane Lili, which struck Louisiana and Mississippi in early October, will likely cost insurers about US$335 million – setting a high initial cat cost for the last quarter of the year.