Introduction

DEFRAYING THE ECONOMIC COSTS OF DISASTERS

The insurance industry plays a vital role in helping individuals and businesses prepare for and recover from the potentially devastating effects of a disaster such as a catastrophic hurricane or storm or wildfire.

 

Natural Catastrophe Losses In The United States, First Half 2016

(Based on perils)

Source: © 2016 Munich Re, NatCatSERVICE; Property Claim Services (PCS®)*, a Verisk Analytics® business. As of July 2016.

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CATASTROPHES IN THE UNITED STATES

Property Claim Services (PCS®), a Verisk Analytics® business, defines a catastrophe as an event that causes $25 million or more in insured property losses and affects a significant number of property/casualty (P/C) policyholders and insurers. PCS estimates represent anticipated insured losses from natural and man-made catastrophes on an industrywide basis, reflecting the total net insurance payment for personal and commercial property lines of insurance covering fixed property, vehicles, boats, related-property items, business interruption and additional living expenses. They exclude loss-adjustment expenses. P/C insurance industry catastrophes losses in the United States rose to $15.5 billion in 2014 from $13.1 billion in 2013 according to PCS, the second consecutive below-average year of losses. The number of claims reached 2.1 million in 2014, compared with 1.8 million in 2013. The number of catastrophes rose to 31 from 28 in 2013. Munich Re estimates shown below are for natural catastrophes only.

 

Top 10 Most Costly Catastrophes, United States (1)

($ millions)

      Estimated insured property loss
Rank   Date Peril Dollars when occurred In 2015 dollars (2)
1 Aug. 2005 Hurricane Katrina $41,100 $49,047
2 Sep. 2001 Fire, explosion: World Trade Center, Pentagon terrorist attacks 18,779 24,613
3 Aug. 1992 Hurricane Andrew 15,500 24,111
4 Oct. 2012 Hurricane Sandy 18,750 19,563
5 Jan. 1994 Northridge, CA earthquake 12,500 18,597
6 Sep. 2008 Hurricane Ike 12,500 13,826
7 Oct. 2005 Hurricane Wilmasp 10,300 12,292
8 Aug. 2004 Hurricane Charley 7,475 9,207
9 Sep. 2004 Hurricane Ivan 7,110 8,758
10 Apr. 2011 Flooding, hail and wind including the tornadoes that struck
Tuscaloosa and other locations
7,300 7,757

(1) Property losses only. Does not include flood damage covered by the federally administered National Flood Insurance Program.
(2) Adjusted for inflation through 2015 by ISO using the GDP implicit price deflator.

Source: Property Claim Services®, a unit of ISO®, a Verisk Analytics® business

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Estimated Insured Property Losses, U.S. Catastrophes, 2006-2015 (1)

 

Year Number of catastrophes Number of claims
(millions)
Dollars when occurred
($ billions)
In 2015 dollars (2)
($ billions)
2006 31 2.3 $9.2 $10.7
2007 23 1.2 6.7 7.6
2008 36 4.1 27.0 29.9
2009 27 2.2 10.5 11.6
2010 33 2.4 14.3 15.5
2011 30 4.9 33.6 35.7
2012 26 4.0 35.0 36.5
2013 28 1.8 12.9 13.2
2014 31 2.1 15.5 15.6
2015 39 2.0 15.2 15.2

(1) Includes catastrophes causing insured property losses of at least $25 million in 1997 dollars and affecting a significant number of policyholders and insurers. Does not include losses covered by the federally administered National Flood Insurance Program.
(2) Adjusted for inflation through 2015 by ISO using the GDP implicit price deflator.

Source: Property Claim Services®, a unit of ISO®, a Verisk Analytics® business.

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Inflation-Adjusted U.S. Insured Catastrophe Losses By Cause Of Loss, 1996-2015 (1)

(2015 $ billions)

(1) Adjusted for inflation through 2015 by ISO using the GDP implicit price deflator. Excludes catastrophes causing direct losses less than $25 million in 1997 dollars. Does not include flood damage covered by the federally administered National Flood Insurance Program.
(2) Includes other wind, hail, and/or flood losses associated with catastrophes involving tornadoes.
(3) Includes wildland fires.
(4) Includes losses from civil disorders, water damage, utility service disruptions, and any workers compensation catastrophes generating losses in excess of PCS's threshold after adjusting for inflation.

Source: Property Claim Services®, a unit of ISO®, a Verisk Analytics® business.

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