Tornadoes, Related Weather Events Cost P/C Industry an Average of $4.9B in Last Eight Years
According to an A.M. Best study, tornadoes and related weather events caused an average of $4.9 billion in property/casualty claims each year from 2001 to 2007. The costliest year was 2006, with more than $8 billion in insured damages.
The study foresees high tornado losses in 2008, based on first-quarter estimates, with about $850 million in insured damages from the “Super Tuesday Tornado Outbreak” in the South in early February. The study found that tornado losses are approaching those of hurricanes, with insured damages of $1 billion or more from a single event becoming more common.
Other key findings of the A.M. Best study:
* On average, tornadoes and related events have accounted for nearly 57 percent of all catastrophe losses per year since 1953.
* A March 31, 1973 tornado in central and northern Georgia was the costliest tornado on record, with $5.35 billion in damage in 2008 dollars, based on total damages, not just property insurance losses. The next four most costly (in 2008 dollars) occurred on June 8, 1966 in Topeka, Kansas ($1.99 billion); May 11, 1970 in Lubbock, Texas ($1.47 billion); May 3, 1999 in Oklahoma City, Oklahoma ($1.34 billion); and April 3, 1974 in Xenia, Ohio ($1.00 billion).
* New Jersey tops the list of states with the highest average expected losses from tornadoes, followed by Connecticut, Massachusetts, Ohio and Rhode Island, based on A.M. Best's analysis of Risk Management Solutions modeling data. Texas has the highest expected annual average occurrence rate, followed by Oklahoma, Kansas, Missouri and Nebraska.
* Although tornadoes can occur at any time of the year, the weather conditions that cause tornadoes are most common from April through September.
Source: Source: III | Published on June 17, 2008
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