Property/Casualty Payouts Hit $25B in 2008

U.S. property/casualty insurers are expected to pay out $25.2 billion in 2008 property losses, the fourth highest annual total in a decade, according to new data released Tuesday from an industry group.

The 37 catastrophes, defined as events with $25 million or more in insured property losses, include hurricanes, severe weather, winter storms and tropical storms, said the Insurance Service Organization's Property Claim Services Unit (PCS). Hurricanes caused the largest amount of loss, currently estimated at $13.3 billion in insured damage. Severe weather events -- damaging winds, large hail, tornadoes, and flooding -- caused an estimated $10.5 billion. Winter storms caused $1 billion in losses, and two tropical storms caused $300 million.

The state of Texas far surpassed all other states with $10.2 billion in insured losses. Louisiana, Minnesota, Ohio, and Georgia rounded out the top five with losses ranging from $1 billion to $2.2 billion.

State Farm Lloyds and Allstate Texas Lloyds, a unit of Allstate ( ALL), are the two largest homeowners insurers in Texas with $1.6 billion and $600 million in 2007 premiums, respectively. 2007 is the most recent annual premium data available. State Farm Lloyds has a TheStreet.com Financial Strength Rating of B- (Good) while Allstate Texas Lloyds is rated a B (Good).

Travelers Lloyds Insurance Co., a unit of Travelers Companies ( TRV), writes homeowners, farmowners, and commercial multi peril coverage in Georgia, Ohio, Louisiana and Minnesota. It had combined 2007 premium volume in those four states of $1.8 billion. It also has a B- (Good) Financial Strength Rating from TheStreet.com Ratings.

Allstate and Travelers both cited losses from catastrophes in their third-quarter results. Year-end results are scheduled to be announced later this month.

" Several extraordinary characteristics" are among the more than three dozen 2008 catastrophes, Gary Kerney, assistant vice president of Insurance Service Organization's PCS, said in a statement. Six consecutive tropical systems made landfall on U.S. coastlines, tornado touchdowns were unusually frequent and related insured property damage contributed to record-setting frequency and significant losses in the first six months of 2008.

The below table includes insured property damage from catastrophe events for the past 11 years:

Catastropic Losses, 1998-2008
chart

TheStreet.com Ratings issues financial strength ratings on each of the nation's 8,600 banks and savings and loans which are available at no charge on the Banks & Thrifts Screener. In addition, the Financial Strength Ratings for 4,000 life, health, annuity, and property/casualty insurers are available on the Insurers & HMOs Screener.

Melissa Gannon is director of insurance and bank ratings for TheStreet.com Ratings, formerly Weiss Ratings, where she directs the operations of the company's insurance and bank ratings division.

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