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Insurance industry

Hurricane Wilma and 2005 Catastrophe Losses Reach Record High

Strategic Insights

— 1 min read

The 2005 hurricane season was the most active on record, with 13 named hurricanes, and insured U.S. property/casualty losses caused by Hurricane Wilma are estimated to reach $6.1 billion. This will push total 2005 catastrophe losses to a record $50.3 billion, with Hurricane Katrina accounting for $45.2 billion of the total losses. Insurers are bracing for 750,000 policyholder claims, with Louisiana being the hardest-hit state, suffering $25.04 billion in insured losses.

Key Takeaways:

  • Insured U.S. property/casualty losses caused by Hurricane Wilma are estimated to reach $6.1 billion.
  • The 2005 hurricane season was the most active on record, with 13 named hurricanes.
  • Total 2005 catastrophe losses are expected to reach a record $50.3 billion.
  • Hurricane Katrina accounted for $45.2 billion of the total losses.
  • Insurers expect 750,000 policyholder claims.
  • Louisiana was the hardest-hit state, suffering $25.04 billion in insured losses.
  • National property/casualty insurers, such as St. Paul Travelers and Allstate, are re-evaluating their coastal exposure and plan to limit their exposure in hurricane-prone states.
  • The 2005 hurricane season officially ends on November 30, but the severity of the season may lead to higher catastrophe losses.
  • The three most devastating hurricanes of the year, Katrina, Rita, and Wilma, combined make up 90% of the total catastrophe losses from 22 events.

Statistics:

  • Insured U.S. property/casualty losses caused by Hurricane Wilma: $6.1 billion.
  • Total 2005 catastrophe losses: $50.3 billion.
  • Losses paid by U.S. property/casualty insurers in the third quarter of 2005: $40.8 billion.
  • Previous worst third quarter (2004): $23.7 billion in losses.
  • 2003 third-quarter cat losses: $3.7 billion.
  • Estimated insured losses from Hurricane Katrina: up to $60 billion.
  • Adjusted losses from Hurricane Andrew (1992): approximately $20 billion.
  • Insured losses in Louisiana (2005): $25.04 billion.
  • Insured losses in Mississippi (2005): $9.9 billion.
  • Insured losses in Texas (2005): $1.5 billion.
  • Insured losses in Florida (2005): $1.3 billion.

Sources:

  • Property Claim Services (PCS) unit of Insurance Services Office Inc.
  • A. M. Best Company, Inc.
  • ISO (Insurance Services Office)

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