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A.M. BEST REVISES WINTER BLIZZARD ESTIMATE TO $1.5 BILLION

 OLDWICK, N.J., April 13 /PRNewswire/ -- A.M. Best Company today has revised its preliminary damage estimate from the winter storm that struck 24 states and the District of Columbia March 12-14 to $1.5 billion.
 On March 15, Best estimated initial damage from the storm to be upwards of $800 million, based on the experience of two previous storms in November and December of 1992 that possessed similar characteristics of the March blizzard. These included high winds, heavy snows and tornadoes over essentially the same eastern seaboard area. After reviewing individual insurance company losses that have recently become available, this new estimate is more accurate.
 "This latest revision is based on a large sample of actual company loss experience," explained John H. Snyder, senior vice president of Best's property/casualty division. The survey showed that those insurers affected by the storm had a combined market share of more than 55 percent in the 24 states and the District of Columbia. After making some adjustments, Best calculated the storm's total gross losses to be $1.5 billion. "This estimate closely corroborates the $1.6 billion loss estimate made by Property Claim Services on March 30," he added.
 Since the beginning of the year, catastrophe losses have totaled $2.2 billion and account for four points on the industry's first-quarter 1993 estimated combined ratio of 112, Mr. Snyder said. In addition to the March blizzard, the World Trade Center bombing is estimated at $510 million, while two large hail/wind storms that struck Texas and Kansas last month caused $125 million and $35 million in damages, respectively.
 "The industry was hoping to return to more normal levels of catastrophes in 1993, but through March, it has yet to happen," Mr. Snyder said. "We currently are on track for another costly year, and we have yet to get through the deadly August-through-October months."
 These catastrophes, combined with the low interest rate environment--which led to the first ever 2 percent decline in the industry's 1992 pretax investment income and a potential decline of 5 percent to 10 percent in 1993--are applying significant pressure to improve the industry's rate adequacy, Mr. Snyder noted. In addition, the industry is more vulnerable to large catastrophes, mainly due to a rate war it has been engaged in for the past five years, weakening its financial condition, and the lack of available and affordable catastrophe reinsurance, which helps soften the impact of disasters, he said.
 -0- 4/13/93
 /CONTACT: Rhonda J. Ruch of A.M. Best Company, 908-439-2200, ext. 5684/


CO: A.M. Best Company ST: New Jersey IN: INS SU:

WB -- NY075 -- 5337 04/13/93 15:44 EDT
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Publication:PR Newswire
Date:Apr 13, 1993
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