CATS ARE GROWLING
There may be more "catastrophe" news in this issue than anyone needs but the first quarter happenings were released this week by the Property Claims Services unit of the Insurance Services Office and the National Association of Insurance Commissioners had some reactions to El Niño.
First quarter cat losses reported by PCS reached $1 billion.
El Niño claims in three months have also hit $1 billion, according to NAIC.
How's that for rounding out numbers.
PCS provides a rundown of the top 10 first-quarter losses and a ranking of the top 10 states for the worst first quarter in recent history.
Unfortunately, Northridge with its $12.5 million loss figures, keeps California on the top of the heap. (See story, page 4.)
However, when it comes to El Niño, Californians appear to have taken heed of the prospective loss environment. NAIC reports that the number of flood policies sold in the state jumped 50 percent between last September and the end of February. That's taking warnings seriously.
Ironically, NAIC reports that there were increases in other areas also, but 75 percent of households in the flood plain remain uninsured.
Overall, there was a 10.1 per cent increase in flood policies, with four million in place at the close of February. (See story, page 3.)
Both NAIC and the California Insurance Department, along with other states, are distributing what they term an "Insurance Consumer Alert" -- Coping with the Aftermath of El Niño -- which provides consumers with advice on dealing with such events.
It is a precedent-setting response from the insurance departments and one that signifies that the states' insurance commissioners are attuned to the real world around them.
While, as in the case of flood insurance, consumers are not always willing to accept the advice of their broker/agents on needed coverage, it is important that state insurance departments go on record by pointing out the "aftermath" of losses resulting from disasters of various sorts and the need to seek necessary protection before it is too late.
There is no doubt that convincing consumers they need flood and earthquake coverage is a difficult sell, but the record is there proving that such risk exposures continue to exist and occur.
Mother Nature is still running the show.
Issue of April 23, 1998
Copyright © 1998 by Underwriters' Report, Inc.