Catastrophes The Driver Of Higher Homeowners Insurance Rates

NATURAL CATASTROPHES: U.S.

If loss trends are similar to the last 20 years expect volatility in homeowners and all property insurance lines rates.

Insured natural catastrophe losses in the U.S. totaled $58 billion in 2012 – far above the 2000 to 2011 average loss of $27 billion (in 2012 dollars) according to Munich Re. Hurricane Sandy, which made landfall in New Jersey, became the worst storm to hit northeastern United States since the Great New England Hurricane of 1938, causing insured losses in excess of $25 billion, including losses covered by the National Flood Insurance Program. Other catastrophes included thunderstorm events with insured losses exceeding $14 billion, the second highest annual total on record, severe drought crippling agriculture over a large section of central United States and dry conditions leading to the most damaging wildfires in Colorado history. The information was released at a Webinar hosted by Munich Re and the Insurance Information Institute. For further information see http://www.iii.org/presentations/2012-natural-catastrophe-year-in-review.html (Note: The Munich Re figures are based on property losses including, if applicable, agricultural, offshore, marine and aviation and National Flood Insurance Program losses.)

Tornadoes accounted for 33.9 percent of insured catastrophe losses, or $130.2 billion in 2011 dollars, from 1992 to 2011, according to ISO. Tornadoes were only topped by hurricane and tropical storm losses, accounting for 42.o percent of insured catastrophe losses (or $161.3 billion in 2011 dollars). (All figures were adjusted through 2011 by ISO. Does not include National Flood Insurance Program losses.)

NATURAL CATASTROPHE LOSSES IN THE UNITED STATES, 1980-2012

(Overall and insured losses)

NATURAL CATASTROPHE LOSSES IN THE UNITED STATES, 1980-2012

Source: © 2013 Munich Re, NatCatSERVICE; The Property Claim Services (PCS) unit of ISO. As of January 2013.

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NATURAL DISASTER LOSSES IN THE UNITED STATES, 2012

NATURAL DISASTER LOSSES IN THE UNITED STATES, 2012

†Overall agricultural crop losses were approximately $20 billion. $15-17 billion was recovered by the public-private multi-peril crop insurance program, making it the biggest loss in U.S. agricultural insurance history. In average years insured losses were around $9 billion.

Source: © 2013 Munich Re, NatCatSERVICE. As of January 2013.

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NATURAL DISASTERS IN THE UNITED STATES, 1980–2012

(Number of events)

NATURAL DISASTERS IN THE UNITED STATES, 1980–2012

Source: © 2013 Munich Re, NatCatSERVICE. As of January 2013.

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U.S. THUNDERSTORM LOSS TRENDS, 1980-2012

(Annual totals 1980–2012)

U.S. THUNDERSTORM LOSS TRENDS, 1980-2012

Source: 2013 Munich Re, NatCatSERVICE; The Property Claim Services (PCS) unit of ISO. As of January 2013.

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U.S. WINTER STORM LOSS TRENDS

(Annual totals 1980 – 2011)

U.S. WINTER STORM LOSS TRENDS

Source: © 2012 Munich Re, NatCatSERVICE.

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NUMBER OF U.S. LANDFALLING TROPICAL CYCLONES, 1900-2012

NUMBER OF U.S. LANDFALLING TROPICAL CYCLONES, 1900-2012

Source: © 2013 Munich Re, NatCatSERVICE; NOAA. As of January 2013.

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INSURED U.S. TROPICAL CYCLONE LOSSES, 1980-2012

INSURED U.S. TROPICAL CYCLONE LOSSES, 1980-2012

Source: 2013 Munich Re, NatCatSERVICE; The Property Claim Services (PCS) unit of ISO; National Flood Insurance Plan. As of January 2013.

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U.S. INSURED CATASTROPHE LOSSES, 1989-2012 (1)

($ billions, 2012 dollars)

U.S. INSURED CATASTROPHE LOSSES, 1989-2012 (1)

(1) Does not include National Flood Insurance Program losses.

*As of 1/2/13. Includes $18.8B gross loss estimate for Hurricane Sandy.

Note: 2001 figure includes $20.3B for 9/11 losses reported through 12/31/01 ($25.9B 2011 dollars). Includes only business and personal property claims, business interruption and auto claims. Non-prop/BI losses = $12.2B ($15.6B in 2011 dollars.)

Source: Property Claims Service/ISO; Insurance Information Institute. As of January 2013. Insurance Information Institute website.