The damaged caused by Hurricane Katrina in late August will cost U.S. property and casualty insurers an estimated $34.4 billion, says a new report released by Insurance Services Office Inc.
According to officials from ISO, which provides data to the risk management industry, that preliminary estimate elevates Katrina to the costliest catastrophe in the nation’s history. Claims related to Hurricane Andrew, which struck in 1992, totaled $20.8 billion in 2005 dollars.
Policyholders in Alabama, Florida, Georgia, Louisiana, Mississippi, and Tennessee are expected to file more than 1.6 million claims for damage to personal and commercial property, according to the ISO report. Louisiana businesses and residents have made the greatest number of filings — 900,000 — claiming $22.6 billion in losses, followed by Mississippi, with 490,000 claims totaling $9.8 billion.
Other risk-assessment companies have estimated that Katrina-related claims could run as low as $14 billion and as high as $60 billion, reported the Associated Press.
Of course, insurance companies still don’t have a complete tally, noted ISO. Handling claims in the stricken area, added the report, “has been difficult for several reasons, including limited access to damaged areas, difficulty in tracking down property owners who evacuated to other locations, and breakdown of the communication infrastructure.” ISO intends to resurvey insurers in 60 days to account for new claims, as well as existing claims that have been closed.
The ISO estimates represent insured losses for commercial and personal property lines of insurance, as well as damage to insured onshore oil facilities. However, it does not include claims made for utilities, agriculture, aircraft, ocean marine, and property under the federal flood insurance program.
Meanwhile, on Tuesday the Securities and Exchange Commission announced that it would ease rules governing access by insurance companies to the capital markets, reported the AP. For example, the SEC reportedly will permit publicly traded insurers to submit reduced paperwork for registering new stock issues. The wire service noted that by enabling insurers to maintain adequate liquidity, the SEC actions should help expedite claims processing and payment.