Insurance Handbook

2018 natural catastrophes

Insured losses due to natural disasters in the United States in 2018 totaled $52 billion, according to Munich Re, down from $78 billion total for 2017. Wildfires, heat waves and droughts, with $18 billion in losses accounted for 34 percent of U.S. insured losses in 2018. Tropical cyclones accounted for another 30 percent of insured losses with $15.6 billion, followed by severe thunderstorms losses with $14.1 billion, or 27 percent of the 2018 insured losses. Winter storms and cold waves with $3.0 billion in insured losses, floods and flash floods with $1.2 million in insured losses and earthquakes and other geophysical events accounted for the remainder of 2018 natural disaster losses.

2017 natural and man-made catastrophes

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.

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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Below are charts from Munich Re, which include flood insurance losses in its calculations. The reinsurer estimated insured natural catastrophe losses in the United States for 2018 at $52 billion.

Loss Events in the U.S., 1980-2018

(Number of relevant events by peril)

Source: © 2019 Munich Re, Geo Risks Research, NatCatSERVICE. As of March 2019. 

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Loss Events in the U.S., 1980-2018

(Overall and insured losses)

Source: © 2019 Munich Re, Geo Risks Research, NatCatSERVICE. As of March 2019. 

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Loss Events in the U.S., 1980-2018

(Overall losses: nominal, inflation adjusted, and normalized)

Source: © 2019 Munich Re, Geo Risks Research, NatCatSERVICE. As of March 2019. 

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Convective Storm Events* in the U.S., 1980-2018

(Overall and insured losses)

Source: © 2019 Munich Re, Geo Risks Research, NatCatSERVICE. As of March 2019. 

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Convective Storm Events* in the U.S., 1980-2018

(Overall losses: nominal, inflation adjusted, and normalized)

Source: © 2019 Munich Re, Geo Risks Research, NatCatSERVICE. As of March 2019. 

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Tropical Storms and Hurricanes in the U.S., 1980-2018

(Insured property losses per state)

Source: © 2019 Munich Re, Geo Risks Research, NatCatSERVICE. As of March 2019.

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Tropical Storms and Hurricanes in the U.S., 1980-2018

(Overall losses: nominal, inflation adjusted, and normalized)

Source: © 2019 Munich Re, Geo Risks Research, NatCatSERVICE. As of March 2019.

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U.S., total catastrophes

The Property Claim Services (PCS) division of Verisk Analytics defines a catastrophe as an event that causes $25 million or more in insured property losses and affects a significant number of property/casualty policyholders and insurers. The estimates in the following chart represent anticipated insured losses from 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.

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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The chart below shows insured losses for the top 10 U.S. catastrophes in dollars when they occurred and in 2018 dollars, adjusted for inflation. Insured losses for the catastrophic hurricanes of 2017—Maria, Irma and Harvey—are represented as a range because factors such as the severity of the losses and the fact that the storms happened in rapid succession, straining resources for the claim settlement process, have hindered the development of final estimates. The amount of insured losses for Irma in Florida are still to be determined; claims have been reopened, and business interruption losses for all three storms are still being settled. The Insurance Information Institute has developed the ranges after studying estimates from catastrophe modelers and other organizations, and plans to revisit the ranges mid-year 2019. To date, losses for 2018 Hurricanes Florence and Michael have not reached the level for inclusion in this chart.

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 Aug. 2017 Hurricane Harvey (3) AL, LA, MS, NC, TN, TX 18,000-20,000 18,400-20,400
5 Sep. 2001 September 11: Fire, Explosion: World Trade
Center, Pentagon terrorist attacks		 NY, VA 18,779 25,958
6 Oct. 2012 Hurricane Sandy CT, DC, DE, MA, MD, ME, NC, NH,
NJ, NY, OH, PA, RI, VA, VT, WV		 18,750 20,688
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 August 8, 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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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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U.S. Inflation-Adjusted Cat Losses, 1980-2018

 

*2018: Inflation-adjusted estimate, subject to change. 2010s is average of 2010 to 2018.

Note: As of Feb. 14, 2019.

Sources: Property Claims Service, a Verisk Analytics business; Insurance Information Institute.

2018 catastrophes

  • Insured losses by state were highest in California in 2018, with $15.1 billion in losses from 87,050 claims.
  • Florida ranked second with $7.9 billion in insured losses and 202,000 claims.

Top Seven States and Territories By Insured Catastrophe Losses, 2018 (1)

($ millions)

Rank State Estimated insured loss Number of claims
1 California $15,094.9 87,050
2 Florida 7,860.6 202,000
3 North Carolina 4,962.1 433,775
4 Colorado 3,931.7 390,150
5 Texas 3,028.3 351,850
6 Georgia 2,150.9 166,150
7 Alabama 1,133.5 60,700

(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.

Source: The Property Claim Services® (PCS®) unit of ISO®, a Verisk Analytics® company.

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Top Three States By Inflation-Adjusted Insured Catastrophe Losses, 1987-2016 (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 the other 47 states plus Washington, D.C., Puerto Rico, and the U.S. Virgin Islands.

Source: The Property Claim Services® (PCS®) unit of ISO®, a Verisk Analytics® company.

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