AM Best Sees Tornado Losses as Manageable for Insurers
The news, the pictures and the sad loss of life has been a horrible thing to see these last few days. Our hearts have broken for these who have suffered immeasurable loss during these holidays. Of course, one might wonder – did the victims have insurance? If so, will the claims be paid, how quickly and will life ever return to normal in those hard-hit areas – especially in our neighboring state of Kentucky. From all indications, losses will be handled with care and efficiency from the insurance companies.
I read a couple of days ago that analysts at ratings firm AM Best said they expect the insured losses from the tornadoes that devastated central and southern U.S. last weekend will dampen underwriting results for insurers but that insurers will be able to absorb them, even though supply chain and inflation challenges may exacerbate losses.
AM Best said insured losses are likely to be concentrated in the commercial and homeowners lines of insurance, with some losses borne by physical damage in auto insurance as well.
Catastrophe modeling firm Karen Clark & Company has estimated that the insured loss from the tornado outbreak will be about $3 billion. This KCC estimate includes privately insured damage to residential, commercial, and industrial properties and automobiles.
The late-season tornado outbreak affected at least six states, including Arkansas, Illinois, Kentucky, Mississippi, Missouri, and Tennessee. KCC notes that there have been 60 reports of tornadoes and over 350 reports of damaging wind gusts. The death toll from the tornadoes has reached 80 as this is written, with many people still missing, according to the Federal Emergency Management Agency (FEMA).
KCC said the most significant damage has been observed in Kentucky.
AM Best noted that losses in Kentucky may be spread out among insurers in the Kentucky market, which it describes as not concentrated. State Farm (19.6%) and Kentucky Farm Bureau Group (18.2%) lead in market share for the impacted commercial and personal lines. Other carriers in the top five are Liberty Mutual (8.8%), Allstate (5.6%) and USAA (4.8%). From our experience here in the agency, insureds with those companies could face increased premiums to help cover this regional loss.
While most of the losses may be limited to primary insurers, AM Best said that the growing frequency of tornadoes and such events will “lead to insurers re-examining their reinsurance protection and to reinsurers becoming more cautious as they look at demand and risk, which may be reflected through pricing, limits, deductibles, and other underwriting tools.”
Team Western Kentucky Tornado Relief Fund
Gov. Andy Beshear has established a fund to assist tornado victims and begin rebuilding. Donate at www.secure.kentucky.gov/formservices/Finance/WKYRelief or by sending a check to Public Protection Cabinet, 500 Mero St., 218 NC, Frankfort, KY 40601.
American Red Cross
Visit redcross.org, call 1-800-RED-CROSS or text REDCROSS to 90999.
Aspire Appalachia
Send donations to paypal@aspireappalachia.org or PO Box 1255, Jackson, KY 41339.
CARE
The nonprofit based in Atlanta is partnering with Louisville’s Change Today, Change Tomorrow to distribute food, water and cash vouchers to affected families. Donate to the tornado relief fund here.
Global Empowerment Mission
The disaster relief nonprofit based in Miami is sending trucks of supplies to western Kentucky, in partnership with Racing Louisville and Louisville City Football Club. Donate funds at http://www.globalempowermentmission.org/mission/kentucky-tornadoes/
Global Giving
The D.C.-based nonprofit has established a Midwest US Tornado Relief Fund at globalgiving.org/projects/midwest-tornado-relief-fund/.
Kentucky Counseling Center
The organization is collecting donations that counselors and social workers in Graves County will distribute to affected families. Donate at kentuckycounselingcenter.com/mayfield-fund/.
Kentucky Tornado Relief Fund
The University of Kentucky College of Medicine has established a GoFundMe page collecting donations at gofundme.com/f/ukcom-student-effort-for-tornado-relief-in-ky.
Kentucky Volunteer Organizations Active in Disasters
Visit kentuckyvoad.org/.
Mayfield Graves County Tornado Relief
Mayfield-Graves County United Way has set up a GoFundMe to collect donations at gofundme.com/f/mayfield-graves-county-tornado-relief. Find other verified fundraisers at gofundme.com/c/act/tornado-outbreak-fundraisers.
Marshall County Fund
The Marshall County Nonprofit Foundation has established a Venmo account to take funds at @MCNPF.
Mercy Chefs
The nonprofit that serves meals following natural disasters has set up at His House Ministries, 1250 KY-303, Mayfield, Kentucky, and will distribute food over the next few days. Donate funds at https://mercychefs.com/donation.
Relevant Church
The church in Mayfield, Kentucky, is taking donations for a tornado relief fund at wearerelevant.churchcenter.com/giving/to/mayfield-tornado-relief.
Rise and Shine
The mutual aid group in Bowling Green is taking donations through Venmo at @riseandshinebgky.
Salvation Army
Visit helpsalvationarmy.org and donate to the Salvation Army Western KY Disaster Relief Fundraiser on Facebook.
United Way of Kentucky
The agency has set up a donation site specifically for tornado victims. Visit uwky.org/tornado.
Western Kentucky Red Cross Disaster Relief Fundraiser
Find the online fundraiser on Facebook.
Let’s continue to consider the storm areas and victims in our thoughts and prayers.
We can contribute our time and money to help others and what better time of the year than now to do that! Here are some places you can consider so you can be a part of this massive recovery effort:
Thanks for giving us the opportunity of serving you during this year. We’re honored to work with you on your insurance and we’re here if you need us. Visit our website – 24/7 – www.BentonWhite.com. Or TEXT or CALL us at 615.377.1212. And, we have an email address you can use to reach us direct – info@BentonWhite.net …. We wish for you and your family a wonderful holiday season and a blessed 2022.
