FOR RELEASE DECEMBER 27, 2005
Contact: Patrick Ward
303-262-6078
415-595-3145 (cell)
ADVISEN ESTIMATES RECORD INSURER LOSSES OF $57.6 BILLION
RELATED TO 2005 HURRICANES
New York, December 27, 2005 – Advisen Ltd., the leading provider of analytics, benchmarking and market information to the global commercial insurance industry, today estimated worldwide insurance and reinsurance losses related to the three major hurricanes that hit the United States this year would amount to $57.6 billion, making the cumulative catastrophe losses the largest on record.
Since mid-October, Advisen has continuously monitored the hurricane losses reported by insurers and reinsurers in response to the devastation caused by Hurricanes Katrina, Rita and Wilma. Based on reported property and business interruption losses to date, Advisen has calculated current after-tax totals per hurricane as follows: Katrina, $28 billion; Rita, $4.5 billion; and Wilma, $4.8 billion. By predicting thus far unreported losses from State Farm, the largest personal lines insurer, unreported losses from regional mutual insurers and smaller global reinsurers, developing and as yet un-filed claims for damage from Hurricane Rita and Hurricane Wilma, and the impact of income taxes, Advisen projects pre-tax insured losses per hurricane to be $40.4 billion for Katrina, $6.4 billion for Rita, and $10.8 billion for Wilma.
The losses amount to more than twice the annual total for other U.S. natural disasters and one and a half times the losses from the 2001 terrorist attacks in New York and Washington.
“The devastation these storms caused has resulted in conflicting and confusing reports related to insurance claims and costs,” said David K. Bradford, executive vice president and editor-in-chief of Advisen. “Our research underscores the extent of the damage caused by these catastrophes, and offers comprehensive insight regarding how these storms will most likely impact the insurance industry based on information currently available.”
Several unsettled variables could cause Advisen’s estimates to increase dramatically. Flood losses could elevate Advisen’s estimates by billions of dollars if the various lawsuits to force insurers to cover flood damage related to Hurricane Katrina are successful. Additionally, several hurricane-related pollution lawsuits could add hundreds of millions of dollars to Advisen’s totals. Advisen anticipates it will be several months before these factors will be settled.
About Advisen
Advisen Ltd. provides insight into key commercial insurance and risk management decisions made by carriers, brokers, risk managers and other insurance professionals. Advisen's ASP platform incorporates real-time analytics and research on over 1.5 million companies, 70 industries and over 200,000 actual program transactions. The Advisen platform includes benchmarking, submission templates, application work-ups, insurance program management, policy & law comparisons, loss & exposure analysis, news, corporate governance, financial metrics and large loss data. Over 25,000 commercial insurance professionals access data from Advisen everyday. Visit www.advisen.com or call 212.897.4800.
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