Catastrophes: Earthquakes and Floods.

A magnitude-7.4 earthquake in Turkey in August killed 17,000 people and caused an estimated $3 billion in insured losses, constituting the most devastating catastrophe of 1999. The country continued to be rocked by aftershocks, including a 7.2-magnitude quake in November.

A report by EQE International cited World Bank statistics that say 15% of the residences in the Istanbul urban area have quake insurance, with as little as 2% in other areas of the country. Even so, insurance industry reserves to cover earthquake damage were just $27 million at year end 1998, according to the World Bank, leading EQE to project insolvencies or failures to pay policyholders.

The second-most costly catastrophe last year was Typhoon Bart, which caused $2 billion in insured losses when it hit Japan in September.

The United States experienced 99 catastrophic events through the first nine months of 1999 with insured losses of $7.4 billion, according Insurance Services Office Inc.'s Property Claim Services unit. In 1998, 37 catastrophe's resulted in $10.07 in insured losses for the year. PCS defines a catastrophe as an event within a territory that causes $25 million or more in insured property losses. It does not include losses to flooding or loss-adjustment expenses.

The costliest U.S. catastrophe last year was a series of four January storms that hit New York, Pennsylvania and New Jersey and the South, leaving $1.75 billion in insured losses in their wake. A series of tornadoes and storms that barreled through Oklahoma and 17 other states in May, caused $1.5 billion in insured property damage, and September's Hurricane Floyd produced $1.8 billion in insured losses, according to the ISO.