Insurance Handbook

2017 natural catastrophes

Insured losses due to natural disasters in the United States in 2017 totaled $78 billion, according to Munich Re, more than triple the $23.8 billion total for 2016. Tropical cyclones with $49.1 billion in losses accounted for 63 percent of U.S. insured losses in 2017. Severe thunderstorms losses, at $18.2 billion, accounted for about 23 percent of the 2017 insured losses. Wildfires, heat waves and drought produced $9.5 billion in insured losses in 2017, or about 12 percent of total. Winter storms and cold waves caused $1.2 billion in insured losses, and floods and flash floods accounted for $100 million in insured losses in 2017.

2016 and 2017 natural and man-made catastrophes

In the first nine months of 2017, the Property Claim Services (PCS) division of Verisk Analytics estimates that direct insured property losses from catastrophes striking the United States were between $36 billion and $40 billion. However, since the three major catastrophes in the third quarter were so large and occurred so close in time to each other, many claims from those events have not been closed. Therefore these ranges are not final.

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 46 percent to $20.9 billion in 2016 from $15.2 billion in 2015, according to PCS. The number of catastrophes rose to 42 in 2016 from 39 in 2015, 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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Top Five Catastrophes of 2016 By Insured Catastrophe Losses (1)

($ millions)

Rank Date States Event Estimated insured loss
1 Apr. 10 - 15 FL, TX Wind and thunderstorm $2,995.1
2 Mar. 23 TX Wind and thunderstorm 1,688.5
3 Apr. 29 - May 3 AR, GA, IL, IN, MD, MO, NC, OK, TX, VA, WV Wind and thunderstorm 1,187.0
4 Aug. 11 - 15 LA, MS Wind and thunderstorm 1,058.9
5 Mar. 17 - 18 AL, AR, FL, LA, MS, TX Wind and thunderstorm 920.1

(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. As of October 20 excluding Hurricane Matthew.

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

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 2016 at $23.8 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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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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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. Insured Catastrophe Losses, 1989-2016

 

2016 catastrophes

  • Texas had the costliest insured catastrophe losses in 2016, $8.0 billion, followed by Colorado with $1.5 billion in losses and Louisiana with $1.2 billion in losses, according to Property Claim Services®, a unit of ISO®, a Verisk Analytics® business.
  • North Carolina ranked fourth with $972 million in insured losses, followed by Florida with $885 million in losses.
  • The five states with the costliest insured disasters in 2016 had a total of $12.5 billion in insured losses, about 60 percent of total U.S. losses of $21 billion.

Top Seven States and Territories By Insured Catastrophe Losses, 2017 (1)

($ millions)

Rank State/territory Estimated insured loss Number of claims
1 Puerto Rico $26,894.3 560,900
2 Texas 22,229.9 1,136,750
3 Florida 16,469.5 1,177,050
4 California 15,209.2 173,650
5 U.S. Virgin Islands 5,009.8 47,300
6 Colorado 2,274.7 236,800
7 Minnesota 1,652.7 145,600

(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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