RJ and Makay

Record first-quarter 2011 catastrophe losses have shaken the property casualty industry. Winter storms, severe thunderstorms and tornadoes, including the largest tornadic event in the nation’s history, are pressuring operating results leading into the upcoming hurricane season.

At least 305 tornadoes struck the U.S. April 25-28, making it the largest outbreak in history, according to the National Oceanic and Atmospheric Administration.  Insured losses from the outbreak will be between $3.7 billion and $5.5 billion, according to Boston-based catastrophe risk modeling firm Air Worldwide.  The estimate is based on residential, commercial, industrial and automobile damage, as well as additional living expense and business interruption losses.

Private U. S property/casualty insurers’ net income (after taxes) rose to $34.7 billion in 2010, compared to $28.7 billion in 2009, with insurers’ rate of return on average policyholders’ surplus increasing from 5.9 percent to 6.5 percent.

Surplus came in at $556.9 billion, a rise of $45.5 billion, or 8.9 percent, compared to a 2009 surplus of 511.4 billion. Insurers’ net investment gains grew $13.8 billion to $52.9 billion in 2010 from $39.2 billion in 2009.