ISO, a risk assessment firm specializing in the property/casualty insurance industry, and the Property Casualty Insurers Association of America (PCI) have released a new report showing the impact natural disasters had upon the P/C insurance industry in 2011. This year has become infamous for the number of severe storms and other natural disasters that have rocked the U.S. and other nations. The report notes that while the property/casualty industry grew in some aspects, it saw steep losses in others, with the most severe losses coming in a short 9-month period.
According to the report, new losses in underwriting swelled to more than $34 billion this year. This is well beyond the $6.3 billion in losses during the same period in 2010. Both ISO and PCI attribute the underwriting losses to higher-than-expected net losses in the industry and loss adjustment expenses connected to natural disasters. ISO estimates that these loss adjustments rose to $33.2 billion this year, up from the $10 billion in adjustments last year.
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The report does bear some good news. Investments in the industry rose to $42 billion this year, up from $39 billion in 2010. Income also rose by $1.3 billion while federal taxes dropped by approximately $6.1 billion.
The report shows that the industry is showing signs of recovery during troubling economic times, but this recovery is offset by the frequency and severity of natural disasters.