The toll to U.S. insurers from the severe thunderstorms and tornadoes in April and May just keeps rising. At the end of May insurer State Farm announced that their claims payments made to clients in the wake of the severe weather were approaching $1 billion. Now, just 18 days later that total is nearing $2 billion.
State Farm says that claims paid for these events have reached $1.75 billion and the figure doubled in less than three weeks. They expect the final figure to be over $2 billion.
Over 400,000 home, business and auto claims have been reported to State Farm since the events. 2011 catastrophe claims payments for State Farm are now over $3.3 billion which includes all events occurring during this year and some residual payments from previous years.
State Farm says that if the events of April and May were categorised as a single event it would be the fifth most costly catastrophe in State Farms history.
With the size of losses being reported from recent events, you have to think that the primary insurers of the size of State Farm (and Allstate who estimated $2 billion in losses the other day) will take a second look at instruments such as catastrophe bonds to provide top layers of cover at fixed costs over multiple years.