Hail, tornadoes and an ice storm turned the first three months of 2017 into the most expensive first quarter in more than 20 years for U.S. insurers.
The unexpectedly harsh weather is surfacing in insurers’ earnings. First-quarter underwriting results for Travelers Cos. worsened year-over-year as catastrophe costs jumped 9% to $347 million. Allstate Corp. and others have warned about increased storm-related claims ahead of their earnings reports, with a slew of property-casualty insurers, including American International Group Inc. reporting this week.
These companies insure millions of cars and homes across the U.S., and some also insure businesses. Insurers are paying out for weather-related vehicle crashes, shattered windows, and damage to roofs of cars and homes from the hail and fallen tree limbs.
Some insurers have said the weather was more typical of second quarters than the first three months of the year.
“We, like the broader industry, are experiencing historic levels of weather-related losses and clearly seeing a troubling weather trend,” Marita Zuraitis, Horace Mann Educators Corp.’s chief executive, told analysts in an April 25 earnings call.
She said the company is “keenly focused on ensuring that our rate plan includes adequate increases to account for this volatility.”
The insured damage from all natural disasters in the U.S. in the first quarter is currently estimated to total nearly $7 billion, according to reinsurance specialist Aon Benfield. Of that, about $6 billion is from severe storms.