December 5, 2011 by Canadian Underwriter
The U.S. property/casualty industry experienced catastrophe-related losses in the first nine months of 2011 that have surpassed the total year-end losses, reported A.M. Best.
Total pre-tax, accident-year catastrophe-related losses, net of reinsurance and reinstatement premiums, were an estimated $38.6 billion during the first nine months of 2011. This marks an increase from the estimated $16.1 billion reported during the same period of 2010. Total year-end 2010 losses were an estimated $19.6 billion, A.M. Best said in its ‘Best Briefing.’
“As a result, catastrophe losses accounted for approximately 12 points on the combined ratio during the first nine months of 2011, compared with approximately five points during the same period last year,” the report says.
“While the impact from natural catastrophes during the first nine months of the year is material to the industry from an earnings perspective, A.M. Best believes the overall industry’s capital will effectively absorb these catastrophe-related losses.”
The majority of the losses stem from the series of tornadoes and hailstorms that swept through the Midwest and Southeast in April and May.
The 2011 Atlantic hurricane season ended with 19 named storms and seven hurricanes, three of which were considered major – Category 3 or stronger – but only one, Irene, made landfall on the U.S. mainland.