2015 first-half catastrophe activity in the North America – the vast majority in the United States – was the lightest since the first six months of 2010, resulting this year in US$8.1 billion in insured losses, note figures released Wednesday by Property Claims Services (PCS), a Verisk Analytics business.
PCS designated 26 catastrophe events (25 in the U.S.) in North America in the first half of 2015. This 20% increase in frequency was coupled with the 36% decrease in severity, notes Barely a Whisper: PCS Q2 2015 Catastrophe Review, available to users of the company’s loss aggregation service. [click image below to enlarge]
“The trend toward increasing numbers of smaller events continues. Last year’s first-half total was pushed higher by five events that each had more than US$1 billion in insured losses. This year, only one attained that level,” the report states.
As such, “2015 is below the first-half, ten-year average of US$10.4 billion despite having frequency above the 10-year average 19.9 events,” PCS points out.
“We’ve been closely watching the trend toward smaller, more frequent catastrophes,” Joe Louwagie, assistant vice president of PCS, says in a statement from the company. “For claims departments across North America, this may have implications for catastrophe response planning, and the claims community should remain vigilant: Hurricanes Katrina, Rita and Wilma followed the quietist first half in the past 10 years,” Louwagie adds.
For the second quarter of 2015, PCS designated 17 catastrophe events in North America producing US$5.3 billion in insured losses. The US$5.3 billion tab brings 2015 first-half Cat losses to US$8.1 billion, a 36% drop from the US$12.6 billion for the same period south of the border in 2014.
“However, total catastrophe losses for the first half of 2015 could go higher, with estimates pending for three North American events (two in the United States and one in Canada),” notes the PCS statement.
The company reports that for 2015 Q2 in the U.S., frequency rose to 16 from 13 in the same period of 2014, but severity dropped 45%. “No second-quarter events in the United States reached the US$1 billion threshold. The largest, at US$992 million, affected 16 states in early April,” the report adds.
Considering PCS-designated events by line, the report shows 2015 Q2 losses were 65% for personal (US$1.5 billion), 22% for auto and 13% for commercial.
Canada, for its part, had one designated Cat event in 2015 Q2, occurring at the end of the quarter. “The wind and thunderstorm event affected Alberta and Saskatchewan, causing $56 million in insured losses,” states the report.
(Catastrophe Indices and Quantification Inc., CatIQ, reported in mid-July that the hail and windstorms that swept across parts of Alberta, Saskatchewan and Manitoba on June 12 caused more than $45 million in insured damage.)
The light Cat activity in Canada in 2015 Q2 follows another light Q2 in 2014 – PCS reports two events in Canada caused insured losses of $140 million, with one event affecting Ontario and the other hitting Manitoba and Saskatchewan – at least compared to 2013, when flooding events in southern Alberta and the Toronto area vaulted insured losses to more than $3 billion for the year.
Looking at losses by U.S. state, PCS reports that for the first half of 2015 “Texas was, unsurprisingly, the state most affected by catastrophes, sustaining a little more than US$2 billion in insured losses.”
Texas was followed by Massachusetts, at slightly less than US $1 billion (largely the result of seven winter storm events in the first quarter of 2015); Oklahoma and Missouri, at US$620 million and US$460 million, respectively; and New York because of first-quarter winter storm activity.
“In all, 25 catastrophe events affected 27 states in the first half of 2015 — compared with 24 for the same period a year ago,” the report notes. The Top 10 states – Texas, Massachusetts, Oklahoma, Missouri, New York, Colorado, Illinois, Kentucky, Tennessee and Arkansas – accounted for almost three-quarters of all U.S. catastrophe loss activity in the first half of 2015, PCS adds.