A series of intense hailstorms across the state of Texas in 2016 resulted in the highest annual losses ever recorded in the state from the peril, surpassing $5 billion, according to 2016 wind and hail loss data from the Texas Department of Insurance (TDI).
“Last year’s hailstorms were relentless. We had 45 days of hailstorms occurring somewhere in Texas during the months of April and May. We also experienced the state’s costliest hailstorm ever in San Antonio. It was a rough year to say the least,” said Mark Hanna, a spokesperson for the Insurance Council of Texas (ICT).
The ICT states that combined, wind damage and hail losses to residential properties in the state of Texas in 2016 also reached a new high of nearly $6 billion, with the majority coming from hail events. 2016’s hail events in the state did hit some reinsurance arrangements, although losses weren’t particularly significant overall.
According to the ICT the April 12th, 2016 hailstorm that struck San Antonio and Bexer County, resulted in an insurance and reinsurance industry loss of $1.4 billion, making it the costliest of the year.
Significant hailstorms also impacted Fort Worth/Arlington, Plano, Wylie and El Paso in 2016, says the ICT, combining to make it the worst year on record for the state, after a fairly challenging 2015.
In fact, the ICT explains that 2015 had previously been the worse year on record for hail losses in Texas, at $1.9 billion. However, more than 500,000 claims from hail events in 2016 is more than double that seen in any previous year. Wind and hail damage to vehicles was also the costliest on record for the state in 2016, at $1.5 billion.
“Fortunately, so far this year, we have had our tornadoes and hailstorms, but the damage hasn’t been anything like we have seen the past two years,” added Hanna.
Individual hailstorm losses aren’t too much of a concern for reinsurance companies, or even insurance-linked securities (ILS) funds that participate via collateralised reinsurance protecting the region, except for the very largest events.
However, a series of events in a single state like Texas clearly has the potential to impact aggregate contracts, particularly nationwide reinsurance arrangements, and as attritional losses rise reinsurers and ILS players could become increasingly vulnerable to losses from these types of events.
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