July 20, 2001 by Canadian Underwriter
Property and casualty insurers incurred US$4.4 billion in catastrophe-related property losses for the second quarter to end June this year, according to the Insurance Service’s Office (ISO).
The nine catastrophic events, of which two storms generated more than US$1 billion in property losses, resulted in this year’s second quarter being the industry’s second worst comparative period for cat costs over the last 10 years. The worst second quarter within the last 10 years occurred in 1998, when the cat loss tally for the three months amounted to around US$4.5 billion.
This year’s second quarter cat cost is up threefold compared with the US$1.4 billion recorded for the same period last year. In addition, the second quarter cat loss is almost six and a half times higher than the US$705 million hit insurers took for the first three months of this year. Total cat property losses for the first half of this year came in at US$5.1 billion (the fourth costliest six-month period since 1992).
The two catastrophic events which stood out in loss size for the second quarter of this year were tropical storm Allison at US$1.2 billion, and a thunderstorm which caused damage of US$1.7 billion across 16 states. The number of claims received for the second quarter relating to catastrophic events reached an almost record high of over a million, with only 1998’s second quarter producing 1.7 million claims. Texas, which bore the brunt of the thunderstorm referred to above, produced the highest insured property loss of US$1.4 billion compared with the other 20 states impacted by cat activity for the second quarter of this year, the ISO says.