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Winter of 2014 Poised To Become One of the Top 5 Costliest Since 1980
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FOR IMMEDIATE RELEASE
New York Press Office: (212) 346-5500; media@iii.org
NEW YORK, February 24, 2014 — Near-record snowfall and prolonged extreme cold throughout many parts of the United States, have resulted in insured losses from winter storms of more than $1.5 billion thus far, according to the Insurance Information Institute (I.I.I.).
The estimated $1.5 billion figure covers events occurring between January 1 and February 21, 2014 with more than 175,000 claims paid to policyholders, according to PCS, a division of Verisk Analytics. The figure includes only two of the four 2014 winter storms to date. The I.I.I. explained that insured losses include roof collapses, downed tree limbs and power lines, burst pipes from freezing and auto accidents.
Many companies have also sustained business interruption and supply chain losses due to severe travel and transportation delays and business closings. Winter does not officially end until March 19.
“Severe winter weather, including snow, sleet, freezing rain, extreme cold and ice damage, accounted for 7.1 percent of all insured catastrophe losses between 1993 and 2012, placing it third behind hurricanes and tropical storms (40 percent) and tornadoes (36 percent) as the costliest natural disasters,” said Dr. Robert Hartwig, president of the I.I.I. and an economist. “While most winter storm losses occur in northern and mountainous regions of the United States, this spate of severe cold has also affected millions of home and business owners in the south, many of whom were unprepared for such extreme conditions.”
Dr. Hartwig added that despite the severity of this winter, losses are well within the magnitude planned for by insurers, noting that the insurance industry entered 2014 in rock solid financial condition, with record claims paying capital.
But, from an insurance point of view, just how serious is winter, historically? To provide some perspective, we’ve shoveled up some winter-weather statistics:
TOP TEN WINTER STORM AND WINTER DAMAGE EVENTS IN THE US AND CANADA, 1980-2013 (1)
(1) Top ten events in original insured loss dollars were adjusted to and ranked by the Insurance Information Institute to 2013 inflation-adjusted values.
Source: Munich Re NatCatSERVICE; Insurance Information Institute.
WINTER STORM AND WINTER DAMAGE EVENTS IN THE US AND CANADA, 1980-2013
(insured losses, millions $2013)
Source: Munich Re NatCatSERVICE; Insurance Information Institute.
INFLATION-ADJUSTED U.S. INSURED CATASTROPHE LOSSES BY CAUSE OF LOSS, 1993-2012 (1)
(2012 $ billions)
(1) Adjusted for inflation through 2012 by ISO using the GDP implicit price deflator. Excludes catastrophes causing direct losses less than $25 million in 1997 dollars. Excludes flood damage covered by the federally administered National Flood Insurance Program.
(2) Includes losses from other perils that frequently accompany tornadoes such as hail, wind and thunderstorms. Excludes snow.
(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 (PCS), a division of Verisk Analytics.
Winter storms caused $2 billion in insured losses in 2013, up dramatically from $38 million in 2012, according to reports from Munich Re. From 1993 to 2012 winter storms resulted in about $28 billion in insured catastrophe losses (in 2012 dollars), or $1.4 billion per year on average, according to PCS.
“Three of the four most costly years ever for insured losses from winter storms and damage occurred in the 1990s, led by the ‘Storm of the Century’ in 1993,” said Hartwig. Also known as the Great Blizzard of 1993, it affected 24 U.S. states and Canada, causing more than $3.2 billion (in 2013 dollars) and 270 fatalities. Areas as far south as central Alabama and Georgia received 6 to 8 inches of snow, Birmingham, Alabama, received up to 12 inches with isolated reports of 16 inches, according to the National Oceanic and Atmospheric Administration. Even the Florida Panhandle reported up to 4 inches of snow with hurricane-force wind gusts.
RELATED LINKS
Facts and Statistics: Winter Storms
The I.I.I.’s free mobile apps can help you create a disaster plan, learn about selecting the right insurance for your needs and budget, and create and maintain a home inventory. Learn more about our suite of apps here.
The I.I.I. has a full library of educational videos on its You Tube Channel. Information about I.I.I. mobile apps can be found here.
THE I.I.I. IS A NONPROFIT, COMMUNICATIONS ORGANIZATION SUPPORTED BY THE INSURANCE INDUSTRY.
Insurance Information Institute, 110 William Street, New York, NY 10038; (212) 346-5500; www.iii.org