Free Insurance Information

In the Year 2008, Payouts for Property and Casualty Claims Hit $25 Billion

January 20, 2009

For the year 2008 it is expected that the cost of meeting claims for property and casualty losses in the United States will reach $25.2 billion. According to new data released Tuesday from an property and casualty industry group, this represents actually the fourth highest annual total in a decade.

A catastrophe is defined as any event with $25 million or more in insured property losses. This could be the result of hurricanes, severe weather, winter storms and tropical storms. The 37 catastrophes that occurred during the calendar year 2008 were defined as such, according to PCS, the Insurance Service Organization's Property Claim Services Unit. The lion's share of the damage according to them was due to the affects of Hurricanes, currently estimated at $13.3 billion in insured damage. Other events that are referred to as severe weather events and include large hail, tornadoes, damaging winds, and flooding, are reported to have caused an estimated $10.5 billion in property and casualty damages. A third category referred to as winter storms caused an additional $1 billion in losses, while two tropical storms are reported to have caused $300 million in property and casualty damages all told.

Of all of those states reporting claims, the state of Texas far surpasses all of the other states in its reporting of the $10.2 billion for insured losses. The other states that form the top five are Louisiana, Ohio, Minnesota, and Georgia with losses reported ranging from $1 billion to $2.2 billion.

The two largest homeowners insurers in Texas are State Farm Lloyds and Allstate Texas Lloyds, which is a unit of Allstate, with respectively in 2007 reporting premiums of $1.6 billion and $600 million. The most recent annual premium data available are for the year 2007. TheStreet.com Financial Strength Rating for State Farm Lloyds B- (Good) while Allstate Texas Lloyds is rated as being at B (Good).
A unit of Travelers Companies, Travelers Lloyds Insurance Co., writes in the states of Georgia, Ohio, Louisiana and Minnesota, farmowners, homeowners, and commercial multi peril coverage. In the year 2007 its combined premium volume for those four states stood at $1.8 billion. Its rating from TheStreet.com Ratings with also at a B- (Good) Financial Strength Rating.

Travelers along with Allstate, both indicated in their third-quarter results, losses from catastrophes. They will be announcing their year-end results later this month.

The assistant vice president of Insurance Service Organization's PCS, Gary Kerney, said in a statement that there were a number of extraordinary characteristics that were common to the more than three dozen 2008 catastrophes.

Tornado touchdowns were unusually frequent with as many as six consecutive tropical systems making landfall on the U.S. coastlines. As a result of this the related insured property damage contributed to record-breaking frequency with extremely significant losses appearing in the first six months of 2008.