HISTORICAL PERSPECTIVE Florida Property Insurance Markets: Unparalleled Risk

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HISTORICAL PERSPECTIVEFlorida Property
Insurance Markets Unparalleled Risk
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Top 10 Insured Property Losses Worldwide,
1970-2004 (2004)
Three of the 10 most expensive disasters is world
history occurred in FL Hurricanes Andrew,
Charley Ivan
All figures are for total losses across all
locations, not just US. Sources ISO/PCS Swiss
Re, Natural Catastrophes and Man-Made Disasters
in 2003, Sigma, no. 1, 2004.
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Top 10 Insured PropertyLosses in US (2004)
Five of the 10 most expensive disasters is US
history occurred in Florida Hurricanes Andrew,
Charley, Ivan, Frances Jeanne
Note 9/11 loss figure is for property claims
only. Sources ISO/PCS Insurance Information
Institute.
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Top 10 Most Costly Hurricanes in US History,
(Insured Losses, 2004)
Eight of the 10 most expensive hurricanes in US
history affected Florida Andrew, Charley, Ivan,
Frances, Georges, Jeanne, Opal Floyd
Sources ISO/PCS Insurance Information
Institute.
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Average Annual Insured Losses(Top 10 States,
Millions)
Distribution of Annual Losses
Normalized losses adjusted for inflation,
housing density, wealth and wind insurance
coverage, based on historical data for 100-year
period 1900-1999. Source Tillinghast-Towers
Perrin
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Inflation-Adjusted U.S. Insured Catastrophe
Losses By Cause of Loss, 1984-2004E¹
Insured disaster losses totaled 221.3 billion
from 1984-2004 (in 2004 dollars)
1 Catastrophes are all events causing direct
insured losses to property of 25 million or more
in 2004 dollars. Catastrophe threshold changed
from 5 million to 25 million beginning in 1997.
Adjusted for inflation by the III. 2 Excludes
snow. 3 Includes hurricanes and tropical storms.
4 Includes other geologic events such as volcanic
eruptions and other earth movement. 5 Does not
include flood damage covered by the federally
administered National Flood Insurance Program. 6
Includes wildland fires.
Source Insurance Information Institute estimates
based on ISO data.
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CATASTROPHE LOSS MANAGEMENTFailure to
Adequately Manage this Risk Has Been Devastating
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Most of US Population Property Has Major CAT
Exposure
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U.S. InsuredCatastrophe Losses ( Billions)
2004 was the second worst year ever for natural
disaster losses in the US after adjusting for
inflation. About 79 of those losses originated
in Florida.
Billions
Note 2001 figure includes 20.3B for 9/11
losses reported through 12/31/01. Includes only
business and personal property claims, business
interruption and auto claims. Source Property
Claims Service/ISO Insurance Information
Institute As of June 30.
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Inflation-Adjusted U.S. Catastrophe Losses By
Cause of Loss, 1984-2003¹
1 Catastrophes are all events causing direct
insured losses to property of 25 million or more
in 2003 dollars. Adjusted for inflation by ISO. 2
Excludes snow. 3 Includes hurricanes and tropical
storms. 4 Includes other geologic events such as
volcanic eruptions and other earth movement. 5
Does not include flood damage covered by the
federally administered National Flood Insurance
Program. 6 Includes wildland fires.
Source Insurance Services Office, Inc (ISO)
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Average Annual Insured Losses(Top 10 States,
Millions)
Distribution of Annual Losses
Normalized losses adjusted for inflation,
housing density, wealth and wind insurance
coverage, based on historical data for 100-year
period 1900-1999. Source Tillinghast-Towers
Perrin
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ROE P/C vs. All Industries 19872004E
2004 ROE excl. hurricanes
Sept. 11
Hugo
Lowest CAT losses in 15 years
2004 ROE reduced due to hurricanes
Andrew
Northridge
2004 p/c estimate based on first 9 months
data. Source Insurance Information Institute
Fortune