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The Shifting Nature of Catastrophic Risk in the United States
Casualty Actuaries Special Interest Seminar October 5, 2012 Baltimore, MD
Steven N. Weisbart, Ph.D., CLU, Senior Vice President & Chief Economist
Insurance Information Institute 110 William Street New York, NY 10038
Office: 212.346.5540 Cell: (917) 494-5945 [email protected] www.iii.org
2
Until Recently (or so we thought),
Only Hurricanes Caused Disasters
Only a Small Part of the U.S. (the Gulf
and South Atlantic Coasts) Was
Vulnerable
Only June-November (Hurricane
Season) Was Worrisome
Only Wind Damage Was Likely
3
Are More Catastrophes Occurring?
3
It Certainly Seems That Way
4
7 of the 10 Most Costly Disasters in U.S. History Were Hurricanes
(Insured Losses, 2011 Dollars, $ Billions)
*Losses will actually be broken down into several “events” as determined by PCS. Includes losses for the period April 1 – June 30.
Sources: PCS; Insurance Information Institute inflation adjustments.
$21.3$24.0 $25.0
$47.6
$19.1
$13.1$11.9$9.0$8.5$7.7
$0$5
$10$15$20$25$30$35$40$45$50
Hugo
(1989)
Ivan (2004)Charley
(2004)
Wilma
(2005)
Ike (2008)Northridge
(1994)
Spring
Tornadoes
& Storms*
(2011)
9/11 Attack
(2001)
Andrew
(1992)
Katrina
(2005)
Earthquake
There have been larger disasters in our history, but none more costly than these, due to growth of exposures and insurance coverage
Tornadoes Terrorism
5
15 Costliest World Insurance Losses, 1970-2011*
Insured Losses, 2010 Dollars, $ Billions
*Through June 20, 2011. 2011 disaster figures are estimates; Figures include federally insured flood losses, where applicable.
Sources: Swiss Re sigma 1/2011; AIR Worldwide, RMS, Eqecat; Insurance Information Institute.
$14.0 $14.9 $16.3$20.5 $20.8 $23.1 $24.9
$35.0
$72.3
$11.3$10.0$9.3$9.0$8.0$8.0
$0
$10
$20
$30
$40
$50
$60
$70
$80
Chile
Quake
(2010)
Hugo
(1989)
Typhoon
Mirielle
(1991)
Charley
(2004)
New
Zealand
Quake
(2011)
Rita
(2005)
Wilma
(2005)
Ivan
(2004)
Spring
Tornadoes
(2011)
Ike
(2008)
Northridge
(1994)
WTC
Terror
Attack
(2001)
Andrew
(1992)
Japan
Quake,
Tsunami
(2011)*
Katrina
(2005)
Taken as a single event, the Spring 2011 tornado season
would be the 7th costliest event in global insurance
history
3 of the 11 most expensive
catastrophes in world history occurred in the past 9 months
6
$1
2.3
$1
0.7
$3
.7
$1
4.0
$1
1.3
$6
.0
$3
3.9
$7
.4 $1
5.9
$3
2.9
$7
1.7
$1
0.3
$7
.3
$2
8.5
$1
1.2
$1
4.1
$3
2.3
$9
.3$1
3.7
$4
.7
$7
.8
$3
6.9
$8
.6
$2
5.8
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12*
US Insured Catastrophe Losses, Yearly, 1989-2011*
*Munich Re estimate for 2012 first half.
Note: 2001 figure includes $20.3B for 9/11 losses reported through 12/31/01 ($25.9B 2011 dollars). Includes only business and personal property claims, business interruption and auto claims. Non-prop/BI losses = $12.2B ($15.6B in 2011 dollars.)
Sources: Property Claims Service/ISO; Insurance Information Institute.
US CAT losses in 2011 were the 5th highest in US history on an inflation-adjusted basis
CAT Losses Surged on
Record Tornado Activity
$ Billions of 2011 dollars
2000s: A Decade of Disaster
2001-2010: $202B (up 122%)
1991-2000: $91B
Number of Federal Major Disaster Declarations, Yearly, 1953-2012*
13 1
7 18
16
16
7 71
21
22
22
02
52
51
11
11
92
91
71
74
84
64
63
83
02
2 25
42
23
15
24
21
34
27 28
23
11
31
38
45
32 3
63
27
54
46
55
04
54
5 49
56
69
48 5
26
37
55
98
19
92
7
43
0
10
20
30
40
50
60
70
80
90
100
53
55
57
59
61
63
65
67
69
71
73
75
77
79
81
83
85
87
89
91
93
95
97
99
01
03
05
07
09
11
*Through August 26, 2012. Sources: Federal Emergency Management Administration at http://www.fema.gov/disasters?field_state_tid=All&field_disaster_type_term_tid=All&field_disaster_declaration_type_value=All&items_per_page=60&=GO ; Insurance Information Institute.
The number of federal disaster declarations set
a new record in 2011.
From 1953-71, the average number of declarations
per year was 16.5.
The average number from 1996-
2010 was 58.4.
The average number from
1972-1995 was 31.7.
Some federal major disaster declarations cover the same storm in separate states; for example, there were 3 declarations for a “severe storm” that
struck DC, Virginia, and West Virginia on June 29-July 1, 2012
Nu
mb
er
Geophysical
(earthquake, tsunami,
volcanic activity)
Climatological
(temperature extremes,
drought, wildfire)
Meteorological (storm)
Hydrological
(flood, mass movement)
Natural Disasters in the United States, 1980 – 2011 Number of Events (Annual Totals 1980 – 2011)
Source: MR NatCatSERVICE 8
37
8
51
2
50
100
150
200
250
300
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
We’ve had at least 150 natural disaster events every year since 2006.
Before 2006 the number of natural
disasters never topped 140 in a year; the 1990-
2005 average was about 100.
Natural Disasters in the United States, 1980 – 2012 Number of Events, January – June only
Meteorological events (Storm)
Hydrological events (Flood, mass movement)
Climatological events (Extreme temperature, drought, forest fire)
Geophysical events (Earthquake, tsunami, volcanic eruption)
© 2012 Munich Re Source: MR NatCatSERVICE
1
61
6
22
20
40
60
80
100
120
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
First Six Months 2012
90 Events
9
The new normal
The old normal
50
100
150
200
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Losses Due to Natural Catastrophes in the United States 1980 – 2012 (Annual Totals 1980 – 2011 vs. First Six Months 2012)
Sources: MR NatCatSERVICE, Property Claims Services
Overall losses (in 2011 values) Insured losses (in 2011 values)
© 2012 Munich Re 10
2012:1H insured losses in the US totaled US$ 9.3bn.
An Upward Trend: Losses Due to Natural Disasters in the US, 1980–2011
11
Overall losses (in 2011 values) Insured losses (in 2011 values)
Source: MR NatCatSERVICE © 2011 Munich Re
(2011 Dollars, $ Billions)
2011 Overall Losses: $72.8 B Insured Losses: $35.9 B
2011 was the 5th most expensive year on record for insured US catastrophe losses.
Roughly half of the overall cost of catastrophes in the US was covered by insurance in 2011.
(Overall and Insured Losses)
12
What Happened in 2011 and the 1st Half of 2012
Lately, Insured Claims from Tropical Storms in the US Have Decreased, but Other Causes of Catastrophes
Have Risen
12
Number of
Events Fatalities
Estimated Overall
Losses (US $m)
Estimated Insured
Losses (US $m)
Severe
Thunderstorm 69 617 $46,548 $25,813
Winter Storm 9 67 $2,708 $2,017
Flood 14 20 $2,705 $535
Earthquake 5 1 $257 $50
Tropical
Cyclone 3 0 $10,700 $5,510*
Wildfire 58 15 $1,922 $855
Other 2 33 $8,000 $1,000
Totals 160 753 $72,840 $35,780
Natural Disasters in the United States, 2011
13 Source: MR NatCatSERVICE *Includes flood losses insured through the NFIP.
Number of
Events Fatalities
Estimated Overall
Losses (US $m)
Estimated Insured
Losses (US $m)
Severe
Thunderstorm 56 69 13,550 8,760
Winter Storm 3 3 80 38
Flood 6 0 12 Minor
Earthquake 1 0 0 0
Tropical
Cyclone 2 1 100 50
Wildfire 22 6 875 500
Totals 90 79 14,617 9,348
Natural Disasters in the United States, 2012 1st Half
14 © 2012 Munich Re Source: MR NatCatSERVICE
15
US Natural Catastrophes 2012
US insured losses from the first half of 2012
totaled $9.3billion.
This was well below the $24.4b in the first half of 2011
(in 2012 Dollars).
Thunderstorms (including tornado/hail), account for
almost all of this, estimated at $8.8b,
Even though claims in 2012 were 1/3 of those from
2011, the first half of 2012 was the third most
costly spring thunderstorm season in US history
16
US Natural Catastrophes 2012
The Good News:
Very mild winter over most of US caused only minor winter storm losses.
Lack of heavy winter precipitation limited spring flooding.
The Bad News:
Lack of heavy winter precipitation has exacerbated
drought conditions.
$500
$530
$830
$975
$980
$1,000
$1,200
$1,400
$1,510
$2,000
$5,000
$6,900
$7,300
$840
$0 $1,00
0
$2,00
0
$3,00
0
$4,00
0
$5,00
0
$6,00
0
$7,00
0
Flooding, April*
Wildfire, Sep. 4-19
Thunderstorms, Apr. 19-20
Thunderstorms, Aug. 18-19
Winter Storm, Jan. 31-Feb. 3
Thunderstorms, Jul. 10-14
Texas Drought, 2011*
Thunderstorms, Jun. 16-22
Thunderstorms, Apr. 14-16
Thunderstorms, Apr. 8-11
Thunderstorms, Apr. 3-5
Hurricane Irene, Aug. 26-28**
Thunderstorms, May 20-27
Thunderstorms, Apr. 22-26
**Includes $700 million in flood losses insured through the National Flood Insurance Program.
Source: PCS except as noted by “*” which are sourced to Munich Re; Insurance Information Institute.
2011’s Most Expensive Catastrophes, Based on Insured Losses
Includes roughly $2B in losses for
May 22 Joplin tornado
17
Includes $1.65B in AL, mostly in the Tuscaloosa and
Birmingham areas
18
Shifting Patterns in Insured Catastrophe Losses
Lately, Insured Claims from Tropical Storms in the US Have Decreased, but Other Causes of Catastrophes
Have Risen
18
19
Historically Most of US Insured Catastrophe Losses Came From Hurricanes and Tropical Storms
Hurricanes still account for the majority of the Top 15 catastrophes, but other types of catastrophes are displacing hurricanes
Thunderstorms (including tornados, large and high winds) are the leading cause of insured loss from 2008-2011 and so far in 2012
A trend/pattern appears to be emerging: More frequent and more intense thunderstorm activity
It is unclear if the recent low level of landfalling tropical cyclones is part of a trend or a longer-term oscillation in activity
The Changing Nature of Insured Catastrophe Losses in the US
20
Inflation-Adjusted U.S. Catastrophe Losses by Cause of Loss, 1990–2011:H11
0.2%
2.4%
3.4%4.9%
6.6%
8.0%
31.8%
42.7%
1. Catastrophes are defined as events causing direct insured losses to property of $25 million or more in 2009 dollars.
2. Excludes snow.
3. Does not include NFIP flood losses
4. Includes wildland fires
5. Includes civil disorders, water damage, utility disruptions and non-property losses such as those covered by workers compensation.
Source: ISO’s Property Claim Services Unit.
Hurricanes & Tropical Storms, $160.5
Fires (4), $9.0
Tornadoes (2), $119.5
Winter Storms, $30.0
Terrorism, $24.9
Geological Events, $18.5
Wind/Hail/Flood (3), $12.7
Other (5), $0.6
Wind losses caused the most catastrophe losses (by far), even excluding
hurricanes/TS.
Tornado share of CAT losses is rising
Since 1990, tropical activity accounted
for 42.7% of insured catastrophe losses
21
U.S. Insured Catastrophe Losses by Cause of Loss, 2011 ($ Millions)
2.8%
1.5%
5.6%
72.1%
15.4%
.
Source: ISO’s Property Claim Services Unit, Munich Re; Insurance Information Institute.
Hurricanes & Tropical Storms, $5,510
Wildfires, $855
Thunderstorms (Incl. Tornadoes , $25,813
Winter Storms, $2,017
Geological Events, $50, (0.1%)
Flood , $535, (1.5%) Other, $1,000
2011’s insured loss distribution was unusual, with tornado and thunderstorm claims accounting for the vast majority of loss.
Thunderstorm/ Tornado losses were 2.5 times above the
30-year average
Tropical activity accounted for just 15.4% of insured
catastrophe losses in 2011
22
Since 2008, insured thunderstorm losses totaled roughly $60 billion vs. about $20 billion for tropical events
This means that insured catastrophe losses over the past 4 years have occurred predominantly in non-coastal areas
Midwest, Plains, Mid-Atlantic regions have been hit hard
Inland sections of coastal states have also been hit hard (e.g., AL, MS, NC)
Higher Catastrophe Losses Are Pressuring Property Insurance Markets
Rates are rising in many areas hit hard by catastrophe losses in recent years.
The Changing Nature of Insured Catastrophe Losses in the US (cont’d)
23
Combined Ratio Points Associated with Catastrophe Losses: 1960 – 2011*
*Insurance Information Institute estimates for 2010 and 2011 based on A.M. Best data.
Notes: Private carrier losses only. Excludes loss adjustment expenses and reinsurance reinstatement premiums. Figures are adjusted for losses ultimately paid by foreign insurers and reinsurers.
Sources: ISO; Insurance Information Institute.
0.4
1.2
0.4 0
.8 1.3
0.3 0.4 0
.71
.51
.00
.40
.4 0.7
1.8
1.1
0.6
1.42
.01
.32
.00
.50
.5 0.7
3.0
1.2
2.1
8.8
2.3
5.9
3.3
2.8
1.0
3.6
2.9
1.6
5.4
1.6
3.3
3.3
8.1
2.7
1.6
5.0
2.6
4.4
9.0
3.6
0.9
0.1
1.1
1.1
0.8
0
1
2
3
4
5
6
7
8
9
10
19
60
19
62
19
64
19
66
19
68
19
70
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
The Catastrophe Loss Component of Private Insurer Losses Has Increased Sharply in Recent Decades—Only in Part Due to Tropical Activity
Avg. CAT Loss Component of the Combined Ratio
by Decade
1960s: 1.04 1970s: 0.85 1980s: 1.31 1990s: 3.39 2000s: 3.52 2010s: 6.70*
Combined Ratio Points
24
2011-12: Nowhere to Run, Nowhere to Hide
24
Most of the Country East of the Rockies Suffered Severe
Weather in 2011
25
Tornadoes, Thunderstorms,
and Large Hailstorms
2012 Is Off to a Worrisome Start, But
a Repeat of 2011 Is Unlikely
25
US Thunderstorm Loss Trends Annual Totals 1980 – 2011 vs. First Six Months 2012
Average thunderstorm losses have increased over fivefold since 1980
26 © 2012 Munich Re Sources: Property Claims Service, MR NatCatSERVICE
First Six Months 2012
$8.8 bn
Thunderstorm losses in 2011 were $25.8 billion—a record
US Thunderstorm Loss Trends January – June Only, 1980 - 2012
Thunderstorm losses for January – June 2012 were much lower than 2011,
but still the third worst spring thunderstorm season loss in history.
Sources: Property Claims Service, MR NatCatSERVICE 27 © 2012 Munich Re
First Six Months 2012
$8.8 bn
28
1,1
33
1,1
32
1,2
97
1,1
73
1,0
82
1,2
34
1,1
73
1,1
48
1,4
24
1,3
45
1,0
71 1
,21
6
94
1
1,3
76
1,2
64
1,1
03
1,0
98
1,6
92
1,1
46 1
,28
2
72
4
1,8
19
1,6
91
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12*
Nu
mb
er
of
To
rna
do
es
*Through June 2012, latest data after adjusting sightings to actual, as of Sept 10, 2012
Source: U.S. Department of Commerce, Storm Prediction Center, National Weather Service at http://www.spc.noaa.gov/climo/online/monthly/newm.html
Increasing Variability: Number of Tornadoes, 1990 – 2012*
Insurers Expect to Pay at Least $2 Billion for the April 2011 Tornadoes in Alabama and a Similar Amount for the May Storms in Joplin
Yearly Range
1990-1997: 1,082 to 1,297
1998-2003: 941 to 1,424
2004-2011: 1,098 to 1,819
798
1301
854
1398
724
304
384
292
293
831 451
0 300 600 900 1,200 1,500 1,800
2007
2008
2009
2010
2011
2012
1st six months rest of year
Source: http://www.spc.noaa.gov/climo/online/monthly/newm.html ; Insurance Information Institute.
Number of Tornadoes, 1st Six Months of the Year vs. Full Year, 2007 – 2012
29
1,685
1,146
1,282
1,691
???
1,102
Location of Tornadoes in the US, 2011
Source: NOAA Storm Prediction Center; http://www.spc.noaa.gov/climo/online/monthly/2011_annual_summary.html# 30
1,894 tornadoes killed 552 people in 2011, including
at least 340 on April 26 mostly in
the Tuscaloosa area, and 130 in Joplin on May 22
Location of Tornadoes in the US, 2012*
*Through July 4, 2012.
Source: NOAA Storm Prediction Center; http://www.spc.noaa.gov/climo/online/monthly/2012_annual_summary.html# 31
Tornadoes killed 68 people through
July 4
Source: Property Claims Service, MR NatCatSERVICE
U.S. Winter Storm Loss Trends, 1980 – 2011
32
Insured winter storm losses in 2011 totaled $2.0 billion. Average winter storm losses have nearly doubled
since the early 1980s
Slide 32
Location of Large Hail Reports in the US, 2011
Source: NOAA Storm Prediction Center; http://www.spc.noaa.gov/climo/online/monthly/2011_annual_summary.html# 33
There were 9,417 “Large Hail”
reports in 2011, causing extensive damage to homes,
businesses and vehicles
Location of Large Hail Reports in the US, 2012*
34
*Through July 4, 2012.
Source: NOAA Storm Prediction Center; http://www.spc.noaa.gov/climo/online/monthly/2012_annual_summary.html#
There were 5,452 “Large Hail”
reports through July 4, 2012,
causing extensive damage to homes,
businesses and vehicles
Location of Wind Damage Reports in the US, 2011
Source: NOAA Storm Prediction Center; http://www.spc.noaa.gov/climo/online/monthly/2011_annual_summary.html# 35
There were 18,685 “Wind Damage” reports through Dec. 27, causing
extensive damage to homes and,
businesses
Location of Wind Damage Reports in the US, 2012*
36
*Through July 4, 2012.
Source: NOAA Storm Prediction Center; http://www.spc.noaa.gov/climo/online/monthly/2012_annual_summary.html#
There were 6,851 “Wind Damage” reports through July 4, causing
extensive damage to homes and,
businesses
Severe Weather Reports, 2011
37 Source: NOAA Storm Prediction Center; http://www.spc.noaa.gov/climo/online/monthly/2011_annual_summary.html#
There were 29,996 severe
weather reports in 2011;
including 1,894 tornadoes;
9,417 “Large Hail” reports
and 18,685 high wind events
Severe Weather Reports, 2012*
38 *Through July 4, 2012.
Source: NOAA Storm Prediction Center; http://www.spc.noaa.gov/climo/online/monthly/2012_annual_summary.html#
There were already 13,177 severe weather reports through
July 4; including 874
tornadoes; 5,452 “Large Hail” reports
and 6,851 high wind events
Large Hail,
9,417 , 31%
Wind
Damage,
18,685 , 63%
Tornadoes,
1,894 , 6%
Tornadoes accounted for just 6% of all Severe
Weather Reports but more than 550
deaths in 2011, the most in 75 years
Number of Severe Weather Reports in US, by Type, 2011
Source: NOAA Storm Prediction Center; http://www.spc.noaa.gov/climo/online/monthly/2011_annual_summary.html# 39
June 29, 2012 Derecho: Traveled 600 Miles from Midwest to Mid-Atlantic
40 Source: National Weather Service: http://www.spc.noaa.gov/wcm/2012/20120629-derecho.png
The June 29 derecho traveled
600 miles in just 10 hours—an average speed of 60 MPH! Peak wind gusts
80-100 MPH.
Millions of people were without power
in sweltering heat for days, particularly in Mid-Atlantic states
10-HOUR RADAR COMPOSITE (2PM – MIDNIGHT)
41
Wildfires
41
42
Subhead: “Wildfires used to be seasonal.
They also used to be regional, pretty much
limited to the more fire-prone areas of the
country.
Today, wildfires no longer have either
characteristic—and that’s not a good thing.”
Callout: “At one point, wildfires were burning
continuously in…Texas over an 18-month
time span.”
Headline: “Growing Wildfire Risk Requires a More
Granular, Nationwide Data Solution for P&C Industry”
Source: Risk & Insurance magazine, June 2012, p. 19
Number of Acres Burned in Wildfires, 1980 – 2012
Source: National Interagency Fire Center © 2012 Munich Re 43
2011: 8.3 million acres, the 4th worst year on record, causing $855 in insured losses
2012 First Half
1.7 million acres
Number of Federal Fire Management Assistance Declarations, 1953-2012*
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 30
92 1
7 52
72 3
0 2 49
17 5
15 6 7
20
47
53
54
40
63
44
70
48
43
39
86
60
51
49
18
11
42
3
2
0
20
40
60
80
100
120
53
55
57
59
61
63
65
67
69
71
73
75
77
79
81
83
85
87
89
91
93
95
97
99
01
03
05
07
09
11
*Through July 31, 2012. Sources: Federal Emergency Management Administration at http://www.fema.gov/disasters?field_state_tid=All&field_disaster_type_term_tid=All&field_disaster_declaration_type_value=All&items_per_page=60&=GO ; Insurance Information Institute.
Some fire management assistance declarations cover separate fires in a single state; for example, there were 3 declarations in 2012 for the
“Oil Creek,” “Squirrel Creek,” and “Arapahoe” fires in Wyoming
From 1953-69, there were no fire
management assistance
declarations
The average number from 1994-
2010 was 48.9.
The average number from
1970-1993 was 3.75.
45
Let’s not forget about hurricanes
45
Whether they make landfall, or not
46
Number of Major & Minor Hurricanes Making US Landfall, 1983-2012
*Through August 31, 2011.
Sources: NOAA, at http://www.aoml.noaa.gov/hrd/tcfaq/E23.html ; Munich Re; Insurance Information Institute.
0
1
2
3
4
5
6
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012*
Major Hurricanes (3-5) Minor Hurricanes (1-2)
No hurricane has made US landfall as a
category 3-5 since Wilma in Oct 2005.
Highest category while on land
47
And did you notice— it’s getting hotter (and, in some places, drier)?
47
Land/Ocean Average Temperatures vs. 20th Century Baseline*
*Northern Hemisphere, month of June each year, through 2012
Source: NOAA, National Climatic Data Center, accessed at http://www.ncdc.noaa.gov/ghcnm/time-
series/index.php?surface=land_ocean®ion=90S.90N&month=6&trend=true&beg_trend_year=1880&end_trend_year=2012&su
bmitted=Submit
By this measure, June 2012
was over 1 degree (F) hotter
than during the average of the
middle of the 20th century.
US Drought Conditions, June 26, 2012
49 © 2012 Munich Re Source: National Drought Mitigation Center
US Drought Conditions, July 31, 2012
50 © 2012 Munich Re Source: National Drought Mitigation Center
2012 US Drought: Implications for Crop (Re)Insurers
51 *Credit Suisse, P&C Sector Forecast, Sept. 12, 2012.
Source: US Drought Monitor: http://droughtmonitor.unl.edu/
The drought has diminished
in intensity over the past month. Crop
insurance combined ratios are
expected to be in the 100-110
range.
52
And don’t forget the flood risk (even though it’s currently mostly federally insured)
52
53
Number of Significant Flood Events,* 1978-2012
*As determined by the NFIP, measured as an event with 1,500 or more paid losses “or occasionally one added for other reasons.” **Through July 31, 2012
Sources: FEMA, at http://www.fema.gov/policy-claim-statistics-flood-insurance/policy-claim-statistics-flood-insurance/policy-claim-13 ; Insurance Information Institute.
3
4
1
0
1
5
0
3
4
2
1
3
8
2
9
2
1
2
4
1
4
5
2
1
3 3
2
5
0
2
5
2
3
7
3
0
1
2
3
4
5
6
7
8
9
10
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
**
We appear to have had at least one “significant” flood every year since 1978, averaging about 3 per year.
Avg. Yearly Number by Decade
1981-1990: 2.3 1991-2000: 3.5 2001-2010: 2.7
Number of Events
54
Upward Trend of Inflation-Adjusted Flood Loss Payments*, 1978-2012
*Excluding 2005 (which was $20.4 billion in 2011 dollars). **Through July 31, 2012
Sources: FEMA, at http://www.fema.gov/policy-claim-statistics-flood-insurance/policy-claim-statistics-flood-insurance/policy-claim-13 ; Insurance Information Institute.
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
19
78
19
79
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
06
20
07
20
08
20
09
20
10
20
11
0
1
2
3
4
5
6
Inflation-adjusted total flood payments, millions number of policies in force, millions$ Millions, 2011 dollars
Millions in force
55
Adjusted* Flood Loss Payments, 1978-2011**: No Discernible Trend
*per million policies in force, in 2011 dollars **Excluding 2005 (which was $4,118 in 2011 dollars).
Sources: FEMA, at http://www.fema.gov/policy-claim-statistics-flood-insurance/policy-claim-statistics-flood-insurance/policy-claim-13 ; Insurance Information Institute.
$2
86 $
38
1
$1
22
$9
9
$4
5
$5
23
$1
17
$2
31
$4
34
$3
63
$2
05
$5
50
$3
21
$1
77
$2
89
$2
35
$7
5
$3
64
$1
20 $
20
9
$5
70
$1
30
$1
18
$6
38
$1
43
$1
40
$3
27
$5
01
$2
43
$1
64
$2
99
$8
12
$3
53
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
07
20
09
20
11
Some of the increase shown here is due to growth in the number of policies
2011 dollars
56
Summary and Conclusions
The frequency and severity of most
catastrophes seems to be increasing
In recent years, thunderstorms and other
severe weather has caused most insured
damage, supplanting tropical storms/
hurricanes
2011 was an especially expensive year for
insured losses, and 2012 appears
directionally similar
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