Article Abstract:
The insurance industry suffered a record number of catastrophic losses in 1992 and will probably report losses of $14 billion for the year. Record numbers of tornadoes and hailstones, flooding in Chicago, IL, Hurricanes Iniki and Andrew and rioting in Los Angeles, CA, were responsible for the unprecedented level of catastrophe-related losses. An analysis of insurance industry and by-line underwriting, commercial multiple peril lines, private passenger automobile underwriting, workers' compensation underwriting and other insurance trends is presented.
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Article Abstract:
Hurricane Andrew will cost primary insurers at least $13.7 billion, or $7.8 billion after reinsurance. The $5.9 billion recoverable through reinsurance will be divided evenly between catastrophe programs and pro rata and quota share programs. 40% of this amount will be absorbed by off-shore reinsurers, leaving another $2.5 billion to be covered by domestic companies. Adverse claim costs - especially inflated construction costs - could boost gross losses to $16.5 billion.
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Article Abstract:
The automobile insurance industry lost financial strength in 1994 because of catastrophes and lower premium income. The industry's combined ratio for 1994 is estimated to be 109.4, higher than 1993's 106.9. Catastrophic losses in 1994 increased to an estimated $14 bil. Claims from the Northridge, CA, earthquake totaled approximately $9 bil. Underwriting premiums increased an estimated 3.7%, but those gains barely paid for inflation, which increased costs by 3%-4%.
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