A Firm Foundation: How Insurance Supports the Economy

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, tornado or wildfire.

Natural Catastrophe Losses In The United States, 2018

(Based on perils)

Source: © 2019 Munich Re, NatCatSERVICE; Property Claim Services (PCS®)*, a Verisk Analytics® business. As of March 2019.

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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 catastrophes on an industrywide basis, reflecting insurance payments before salvage, subrogation or reinsurance for personal and commercial property lines of insurance covering fixed property, vehicles, boats, related-property items, business interruption and additional living expenses. PCS estimates do not include loss adjustment expenses.

P/C insurance industry catastrophes losses in the United States in 2018 dropped by more than half (53 percent) to $47.5 billion in 2018 from $101.9 billion in 2017, according to PCS. Insured losses in 2017 were the highest since PCS began collecting insured loss data in 1949. The number of catastrophes rose to 55 in 2018 from 46 in 2017. The number of catastrophes in 2018 was the highest number of catastrophes for years with an industry loss event threshold of $25 million.

Top 10 Costliest Catastrophes, United States (1)

($ millions)

      Estimated insured property loss
Rank Date Peril Location Dollars when occurred In 2018 dollars (2)
1 Aug. 2005 Hurricane Katrina AL, FL, GA, LA, MS, TN $41,100 $51,882
2 Sep. 2017 Hurricane Maria (3) PR, USVI 25,000-30,000 25,600-30,700
3 Sep. 2017 Hurricane Irma (3) AL, FL, GA, NC, PR, SC, USVI 20,000-25,000 20,400-25,600
4 Sep. 2001 September 11: Fire, Explosion:
World Trade Center,
Pentagon terrorist attacks
NY, VA 18,779 25,958
5 Oct. 2012 Hurricane Sandy CT, DC, DE, MA, MD, ME, NC, NH, NJ,
NY, OH, PA, RI, VA, VT, WV
18,750 20,688
6 Aug. 2017 Hurricane Harvey (3) AL, LA, MS, NC, TN, TX 16,000-19,000 16,400-19,400
7 Aug. 1992 Hurricane Andrew FL, LA 15,500 25,404
8 Jan. 1994 Northridge, CA earthquake CA 12,500 19,595
9 Sep. 2008 Hurricane Ike AR, IL, IN, KY, LA, MO, OH, PA, TX 12,500 14,631
10 Oct. 2005 Hurricane Wilma FL 10,300 13,002

(1) Property losses only. Excludes flood damage covered by the federally administered National Flood Insurance Program. Ranked on dollars when occurred. As of March 6, 2019.
(2) Adjusted for inflation through 2018 by the Insurance Information Institute using the GDP implicit price deflator.
(3) Insurance Information Institute estimate based on data from catastrophe risk modelers, reinsurance companies, the Property Claims Services unit of Verisk Analytics,
the Federal Emergency Management Agency of the U.S. Department of Homeland Security, and the Florida Office of Insurance Regulation. These estimates are preliminary
because the organizations involved periodically resurvey the events, and the severity of losses and other factors create a high level of uncertainty surrounding the
ultimate loss figures.

Source: Insurance Information Institute, catastrophe risk modelers, reinsurance companies, U.S. Department of Homeland Security, the Florida Office of Insurance Regulation,
the Property Claim Services® (PCS®) unit of ISO®, a Verisk Analytics® company, and the U.S. Bureau of Economic Analysis.

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Estimated Insured Property Losses, U.S. Catastrophes, 2009-2018 (1)

 

Year Number of
catastrophes
Number of claims
(millions)
Dollars when occurred
($ billions)
In 2018 dollars (2)
($ billions)
2009 27 2.2 $10.5 $12.25
2010 33 2.4 14.3 16.4
2011 30 4.9 33.6 37.8
2012 26 4.0 35.0 38.6
2013 28 1.8 12.9 14.0
2014 31 2.1 15.5 16.5
2015 39 2.0 15.2 16.0
2016 42 3.0 21.7 22.6
2017 46 5.2 101.9 104.2
2018 55 NA 47.5 47.5

(1) Includes catastrophes causing insured property losses of at least $25 million in 1997 dollars and affecting a significant number of policyholders and insurers. Excludes losses covered by the federally administered National Flood Insurance Program.
(2) Adjusted for inflation through 2017 by the Insurance Information Institute using the GDP implicit price deflator.

Source: Property Claim Services® (PCS® ), a unit of ISO® , a Verisk Analytics® company; U.S. Bureau of Economic Analysis.

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Inflation-Adjusted U.S. Insured Catastrophe Losses By Cause Of Loss, 1997-2016 (1)

(2016 $ billions)

(1) Adjusted for inflation through 2016 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 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: The Property Claim Services® (PCS®) unit of ISO®, a Verisk Analytics® company.

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