Evaluating the 'Soft Costs' of Hard Weather

Perhaps you have noticed that weather patterns seem different today than when you were growing up. Indeed, 1999 was a record-setting year for volatile weather, with 17 major disasters declared. Severe weather was both more frequent and more expensive than ever. According to figures from the Insurance Services Office, insurers will pay out $2.1 billion for claims resulting from seven natural disasters in the third quarter of 1999 alone. Topping the list of disasters is Hurricane Floyd, a not-so-distant memory for most of us. Based on revised ISO estimates of insured property losses from the storm, insurers are expected to pay $1.8 billion to Hurricane Floyd victims. This estimate is up $500 million from the original estimate of $1.3 billion in September 1999. Unfortunately, Hurricane Floyd may be a sign of things to come.