5 February 2014

PCS: frequency during benign cat season underlines threat

Despite 2013 being a benign catastrophe season for the US market in terms of losses, the frequency of events suggests that the industry should remain vigilant.

That is the word from Property Claim Services whose review of the market entitled Close Call found that there were 29 designated catastrophe events in the US last year, putting it slightly above the ten-year average.

However, industry-wide losses in the US amounted to only $12.7 billion from 1.8 million claims, 38 percent below the ten-year average and 63 percent below the $34.96 billion of losses suffered in 2012.

The US was spared any major hurricane losses during the year, with 2013 the eighth year in a row in which a major hurricane has failed to make landfall in the US.

Nevertheless, 25 US states and D.C. suffered catastrophe events, with Oklahoma and Texas having faced losses of $2 billion and $1.5 billion respectively.

The report found that Louisiana has been the state most affected by catastrophe losses over the past ten years, having suffered $33 billion in losses. The state is closely followed by Florida, which lost $32 billion during the same period. However, in 2013 Louisiana only suffered $593 million in losses and Florida was unaffected by PCS-designated storms.

Canada: a very different picture

Results for Canada were markedly different, with the country having been struck by six designated catastrophe events in 2013. Losses reached $3 billion across 92,300 claims, representing a 170 percent increase from the $1.1 billion of losses in 2012.

PCS found that the increase in average payment rise sharply due to nature and magnitude of loss events affecting Canada.

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