National Underwriter - October 3, 2011

Insurers Report More Billion-Dollar
Weather Losses As Disasters Continue

Severe weather events heavily affected
many of the insurer’s top states for busi-
ness, according to Highline Data, a part of
Summit Business Media, publisher of NU.
About 15. 3 percent of American Family’s
direct-written premiums come from Mis-
souri. Other than the Joplin twister, a tor-
nado in St. Louis and a windstorm in Kansas
million, it is now estimated that losses could
be twice that amount.
Mark Hanna, public-relations manager
for the Insurance Council of Texas, says loss-
es from the Bastrop fire alone are thought to
be around $250 million, making it the costli-
est fire in Texas history. He says the fire
has resulted in about 1,500 claims.
The second-costliest fire in Texas
history, the Possum Kingdom fire, also
occurred this year and is expected to
generate between $160 million and
$175 million in insured losses. Hanna
notes there were two Possum Kingdom
fires—one in late spring and the other
over Labor Day weekend. For the first
of the two fires, Hanna says high-dollar
homes were affected, making average
losses per claim of around $750,000.
“For the year right now, I would
bet that we’re pushing a half-billion
dollars,” Hanna says. “This has been
a record year.” He blames the combination
of no rain and record-high temperatures
the state has seen in June, July and August.
Strong winds have not helped either.
Current wildfire activity is not as bad
as it was in the recent past, but that could
change quickly. “Wildfire season is going to
end when we get some rain,” Hanna says.
He adds that portions of the state have got-
ten some precipitation, but large portions
of the state are still “dry as a tinder box.”
Internationally, Typhoon Roke, which
recently struck Japan’s main island, Hon-
shu, is expected to cost insurers between
$150 million and $600 million, according
to catastrophe-modeler AIR Worldwide.

AIR says the most readily available damage reports are from typhoon-induced flooding, with the latest information from the Japan Fire and Disaster Management Agency suggesting that roughly 550 homes have experienced inundation at first-floor level and more than 1,160 homes have experienced inundation below the first floor. NU

BY CHAD HEMENWAY AND PHIL GUSMAN

U.S. INSURERS continue to release information on 2011 weather-re- lated losses, with State Farm saying it has paid policyholders $5 billion so far during the year.

The company says 2011 is “likely to be one of the company’s busiest years on record for catastrophe losses.” The company notes that a “ summer of wildfires, tropical storms and hurricanes followed a spring of relentless tornadoes and hailstorms,” adding that State Farm agents and claims representatives have assisted policyholders on more than 970,000 catastrophe claims this year through Sept. 23.

E WILDFIRES CONTINUE TO BURN in drought-stricken Texas, and insured losses for the year are estimated to reach $500 million. See the chart on page 10 for more information.

“The unrelenting, widespread, volatile weather continues to cause problems for our policyholders. Our claim teams have risen to the challenge, and we are prepared with the necessary resources to respond. About 4,300 specifically dedicated catastrophe-claim representatives have joined thousands of local claim professionals and agents at catastrophe sites across the country,” says Brian Boyden, State Farm executive vice president, in a statement.

State Farm adds it has reported declared catastrophes this year in 41 states and the District of Columbia.

American Family Insurance reports catastrophe losses in 2011 will reach the $1 billion mark. The Madison, Wisc.-based insurer of homes, automobiles, businesses and farms says it has paid about $100 million to victims of a destructive tornado in Joplin, Mo. last May.

The Joplin tornado destroyed 400 American Family-insured homes and damaged hundreds of others. Policyholders filed 2,300 property, auto and commercial claims.

City—both in April—generated more than 21,000 claims and claim payments of $28.5 million and $76.4 million, respectively.

The insurer’s home state is its top state for business, accounting for nearly 17 percent of its direct-written premiums. According to Highline Data, American Family was the top homeowners’ insurer in Wisconsin in 2010 with a 22. 9 percent market share.

In Missouri, American Family is second to State Farm for homeowners’ insurance with a 16.7 percent market share.

As of July 31, American Family paid $963.5 million in claims and expects the total to reach $1 billion after payments in August. This is the third year American Family has reached the $1 billion mark in catastrophe losses. The other years were in 2006 and 2008. The insurer says it paid out $906.3 million for claims in 2010.

Wildfires continue to burn in drought-stricken Texas. While it was thought in early September that Texas wildfires this year would cause insured losses of around $250