Hurricanes drive up 2004 cat costs: ISO

The quartet of Atlantic hurricanes this past fall drove catastrophe losses in the U.S. up to a record US$27.3 billion in 2004, according to the Insurance Services Office’s (ISO) Property Claims Services (PCS) unit.
The only year in the past decade which even approached 2004’s loss total was 2001, following the September 11 terrorist attacks, when losses hit US$26.5 billion.
It was not only the unprecedented frequency of major events which drove up insured losses, but also severity the average cat cost insurers US$1.26 billion in 2004, twice the average cost seen over the past decade. The only other year in which it was higher was 2001, when the 9/11 terrorist attacks drove up the average. 2004, however, presented multiple multi-billion dollar loss events.
Overall in 2004, almost 3.4 million claims were filed by personal and commercial policyholders in 42 states and Puerto Rico as a result of catastrophes. Worst hit was Florida, with Hurricanes Charley, Frances, Ivan and Jeanne producing US$18.8 billion in claims. Alabama was a distant second with US$1.8 billion in cat losses.
The hurricanes alone produced more than 2.2 million claims in 16 states and Puerto Rico.
In the fourth quarter of 2004, insured catastrophe losses dropped significantly, to just US$450 million from three events. This compares with the record fourth quarter cat losses in 2003, where the California wildfires boosted insured losses to US$2.64 billion.