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HURRICANE ANDREW'S ESTIMATED COST TO PROPERTY INSURERS REVISED TO $15.5 BILLION BY PROPERTY CLAIM SERVICES

 RAHWAY, N.J., Feb. 24 /PRNewswire/ -- Property/casualty insurance companies will pay $15.5 billion in claims to victims of Hurricane Andrew in Florida and Louisiana, according to a revised estimate from the Property Claim Services (PCS) division of the American Insurance Services Group (AISG).
 The insured damage estimate for Hurricane Andrew in Florida was raised to $15 billion; the Louisiana damage estimate remained unchanged at $500 million, said Gary Kerney, director of catastrophe services at PCS.
 PCS's new estimate for Hurricane Andrew pushes total insured catastrophe losses in 1992 to $23 billion -- more than three times the previous record of $7.6 billion in 1989, according to Kerney.
 PCS had initially estimated in September 1992 that the insured property losses from the hurricane would total $7.3 billion. That figure was increased to $10.7 billion in November 1992.
 Based on current figures, PCS estimates that the industry will receive about 625,000 claims from policyholders in Florida. Six months after Hurricane Andrew struck on Aug. 24, 1992, nearly 600,000 of those claims have been reported and more than 90 percent have been settled, according to Kerney.
 Nearly two-thirds of total claims in Florida were for damage to homes and their contents, PCS said. Nearly one-fourth of Florida claims were for automobiles, and one-tenth of claims were for business losses.
 The revised PCS estimate is based on a survey of insurance companies which collectively write more than 80 percent of the personal and commercial lines premium volume in Florida. The estimate reflects insurance claim payments for dwellings, commercial properties, businesses, vehicles and boats.
 The PCS estimate does not include losses involving uninsured property, such as damage to government military facilities or other public property, utility equipment, such as power lines, the cost of emergency services, economic losses such as crop damage and lost tax revenue, aircraft, and property insured under the National Flood Insurance Program or Write-Your-Own Program. The PCS estimate also excludes the insurance companies' costs of settling claims as well as other company expenses associated with the storm.
 The estimated losses calculated by PCS, although not directly comparable, track the estimates reported by A.M. Best Company, Kerney explained. Best estimates total losses from the storm that struck Florida and Louisiana to be $16.1 billion. Further, Best estimates the total losses could ultimately reach $16.5 billion.
 However, in addition to the insured losses, A.M. Best's figure contains estimates of costs not included in the PCS estimate -- loss adjustment expenses involved with settling claims, additional reinsurance costs, and to a lesser extent other expenses. A.M. Best says that, in total, these additional estimates could add nearly 15 percent to the PCS claims loss estimates.
 The new PCS estimate takes into account such factors as material price increases that occurred immediately after the storm, the additional damage caused by the torrential rains that fell soon after Andrew passed, and the impediments posed by the building permit process and reconstruction requirements.
 A number of important developments in Florida could affect claims costs further, although it is difficult to judge the potential degree, Kerney said.
 These include the possible resurgence of building costs should demand develop; the potential for additional rain damage to exposed building interiors; additional living expense coverage for those in the rebuilding process; and, pending legal action initiated by Dade County.
 "Although none of these factors alone represents a significant cost increase," Kerney said, "their combined impact must be carefully monitored. PCS will continue to monitor the situation."
 THE TEN MOST COSTLY INSURED CATASTROPHES
 Month/Year Perils Insured Loss
 August 1992 Hurricane Andrew $15,500,000,000
 September 1989 Hurricane Hugo 4,195,000,000
 October 1991 Oakland fire 1,700,000,000
 September 1992 Hurricane Iniki 1,600,000,000
 October 1989 Loma Prieta, Calif. earthquake 960,000,000
 December 1983 Wind, snow, freezing
 (41 states) 880,000,000
 April-May 1992 Los Angeles riots 775,000,000
 April 1992 Wind, hail, tornadoes and
 flooding (Texas, Oklahoma) 760,000,000
 September 1979 Hurricane Frederic 752,510,000
 August 1983 Hurricane Alicia 675,520,000
 Source: Property Claim Services division, American Insurance Services Group, Inc.
 THE TEN MOST COSTLY INSURED CATASTROPHES OF 1992
 Month Perils (States) Insured Loss
 August Hurricane Andrew -- wind,
 tornadoes and flooding
 (Florida, Los Angeles) $15,500,000,000
 September Hurricane Iniki -- wind
 and flooding 1,600,000,000
 April-May Los Angeles riots 775,000,000
 April Wind, hail, tornadoes and
 flooding (Texas, Oklahoma) 760,000,000
 December Wind, flooding, snow (10 states) 650,000,000
 March Wind, hail, tornadoes and flooding
 (Texas, Los Angeles, Florida) 610,000,000
 June Wind, hail and tornadoes
 (Kansas, Oklahoma) 570,000,000
 November Wind, hail, tornadoes and flooding
 (11 states) 425,000,000
 April Water damage (Illinois) 300,000,000
 April Wind and hail (Iowa, Kansas,
 Missouri and Oklahoma) 275,000,000
 Source: Property Claim Services division, American Insurance Services Group, Inc.
 -0- 2/24/93
 /CONTACT: Bethany Crawford of AISG, 212-669-9200/


CO: American Insurance Services Group ST: Florida, Louisiana, New Jersey IN: INS SU:

GK-OS -- NY059 -- 0053 02/24/93 16:04 EST
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