NEW YORK--(BUSINESS WIRE)--Severe winter weather is damaging the results of property/casualty insurance companies through large losses in early 2014, according to Fitch Ratings, although no rating impact is expected.
The severe winter weather from Jan. 1 to Feb. 21 has generated the fifth costliest year in the last 34 for insured losses with $1.5 billion of losses from approximately 175,000 claims, according to estimates of the Insurance Information Institute.
The weather will also likely impact the overall economy, particularly in the form of consumption measures. The Chief Economist at the Bank of Tokyo-Mitsubishi estimates that the winter weather could impact first quarter GDP by half a percentage point.
Most claims experience is derived from the upper Midwest and New England regions. However, record cold temperatures in many regions and widespread snowfall have expanded the scope of weather-related losses this season. It will take some time for insurers to completely tally the losses from this prolonged period of heavy snow and extreme cold, though a few companies have provided some loss estimates.
Allstate announced estimated pre-tax losses related to catastrophes for January 2014 of $277 million while Chubb reported a preliminary estimate of $150 million to $200 million of pre-tax losses from two events in early January. Also, Cincinnati Financial estimated catastrophe losses of $65 to $85 million as a function of these events.
Fitch will monitor individual company results to see if rating actions will be necessary, but at this time does not anticipate any ratings will be impacted.
Additional information is available on www.fitchratings.com.
The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article, which may include hyperlinks to companies and current ratings, can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.