Disasters Hitting Insurance Hard

Profits of property/casualty insurers have declined because of tropical storms this summer and other catastrophes earlier in the year, according to the Hartford Courant. Recently The Travelers Cos. reported third quarter earnings that were 67 percent lower, compared with the same quarter last year; Allstate estimated that its catastrophic losses for the quarter totaled $1.08 billion; and Chubb Corp. said that Irene lowered its profits for the quarter, compared with last year.

“It was by no means even close to the worst third quarter in history,” said Robert Hartwig, president of the Insurance Information Institute. This year is expected to rank either sixth or seventh among years with the largest insured losses for natural disasters. Hartwig went on to explain that this has not been typical among years with high catastrophe losses where there is usually a single major event like Hurricane Katrina. Hartwig said that instead there were several $1 billion or $2 billion events. As of October 21 the Federal Emergency Management Agency had issued 89 disaster declarations, setting a new record. Hartwig also discussed commercial, auto and homeowners insurance financial results.