American insurers paid policyholders $2.9 billion for damage related to winter weather.
The Insurance Information Institute (I.I.I.) has released its data with regards to the payments made by insurers in the United States for claims relating to winter weather, and what they’ve said is that those payouts reached a total of about $2.9 billion, last year.
That said, despite those winter-related payments, the I.I.I. says insurance companies are still financially strong.
Despite the payments the insurers faced in the U.S., the Insurance Information Institute explained that those companies will still be in a strong enough financial position to be able to make it through any massive winter storms that will occur this year, including the one that just struck the East Coast last weekend. While the insured losses may be significant from these storms, insurers have prepared themselves though their prediction models and will be able to cover the associated payments from those claims.
Experts from the Insurance Information Institute predict that severe winter weather will only worsen.
According to I.I.I. president and economist, Dr. Robert Hartwig, “Insured losses caused by severe winter weather are on the rise.” He underscored the fact that, when looking back over the last couple of years, 2014 and 2015 both saw losses from winter weather that is notably higher than the usual experience from the insurance industry at during that time of year.
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The $2.9 billion in payments for winter weather related losses in the U.S. last year represented a massive 26 percent spike over the losses from 2014. When compared to where they had been in 2013, they were a tremendous 53 percent greater – which was the difference of about $1 billion. This, according to data released in the statement from the I.I.I.
Hartwig went on to explain that “Despite the sharp escalation in winter storm losses in recent years, insurers entered 2016 with near-record claims paying capital on hand and are financially prepared for anything Mother Nature has in store.”
Looking backward, again, from 1995 through 2014, losses from winter storm claims made up 6.8 percent of all insured catastrophe losses that occurred in the country. This landed them in third place, according to the Insurance Information Institute’s data (behind hurricanes and tropical storms, and tornadoes).