Claim representatives from State Farm have announced that as a result of the devastating storms that occurred in April and May of this year, the insurer paid out almost $1.75 billion to its customers.
In under three weeks’ time, the total claim payments made by State Farm have come close to doubling.
This announcement closely follows that of the largest publicly traded American home and auto insurer, Allstate Corp., which reported its April and May losses at about $2 billion after the severe thunderstorms and tornados in those months alone nearly matched the total 2010 catastrophe losses for that company.
Equally, Travelers Companies Inc. announced its April and May catastrophe losses were at least $1 billion. As a result, that insurer will be facing an operating loss in the second quarter, and its share buybacks will have to slow.
AIR Worldwide’s risk modeling has calculated that as a result of the severe weather events, the worst week in late May will likely have led to insured losses somewhere between $4 billion and $7 billion overall in the insurance industry.
According to State Farm, there have been more than 400,000 claims by its policyholders for home, business, and auto, as a result of the extreme weather in April and May. There remain more than 4,000 claims professionals across the nation, within 130 local claim offices (as well as two major centralized operation centers for claims) who remain deployed for the processing of these claims.
State Farm’s catastrophe claim payments alone for 2011 have topped $3.3 billion. This total includes all of the events that have occurred within this year to date as well as any residual payments that have continued to be paid out for past catastrophes that occurred before the year began.