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Talk of the bay

Insurers get a second-quarter break from big payouts

By JEFF HARRINGTON
Published July 11, 2005

With the hurricane season off to a fast start, insurers can at least take solace in having had a nice breather.

The quarter ended June 30 was the best second quarter in a decade for the insurance industry in terms of fewest catastrophic losses.

U.S. property/casualty insurers are expected to pay out about $920-million in insured property losses for the quarter from just four catastrophes affecting 25 states, according to preliminary estimates by the industry number-crunchers at ISO.

The most expensive disaster was a severe thunderstorm in early May that caused $305-million in damage across 14 states. Texas was the hardest hit state in the three-month period, socked with $315-million in losses; rounding out the top five were Nebraska, Kansas, Oklahoma and Colorado.

The totals are a pittance compared with the $2.3-billion insurers doled out to cover losses in the second quarter of 2004 and the $5.1-billion in the second quarter of 2003. The worst-ever second quarter came in 2001: $6.2-billion in losses, including $1.2-billion from Tropical Storm Allison and $1.7-billion from a thunderstorm that swept through 16 states.

But ISO spokesman Dave Dasgupta said the recent, relatively light quarter doesn't necessarily mean insurers' reserves are in better shape heading into the brunt of hurricane season. Nor does it mean 2005 as a whole is shaping into a less catastrophic year.

"It's one quarter alone," Dasgupta said. "It's too soon to make any projections."

[Last modified July 8, 2005, 19:11:02]