First half natural catastrophe losses for US property and casualty insurers have already topped total loss figures in 2010.
According to ratings agency AM Best, estimated total pretax catastrophe-related losses were $27bn in the first half of 2011, compared to $11.9bn for the same period last year.
US insurers reported losses from the Japan earthquake, New Zealand earthquake and flooding in Australia. Within the US, insurers faced losses from blizzards in the midwest, wildfires in the southwest and severe tornadoes and flooding across the country.
AM Best said the vast majority of losses came from tornado activity in April and May, particularly in Tuscaloosa, Alabama and Joplin, Missouri, which rank among the most expensive tornados in US history.
The ratings agency also said: “The overall industry has the capital to effectively absorb the losses, as the impact from natural catastrophes in the first half of the year has impacted the industry from an earning perspective, not a capital standpoint.”
“However, the US property and casualty industry will be tested though the remainder of 2011 as budgets for catastrophe-related losses have already been exhausted.”
AM Best believes any losses related to the Atlantic hurricane season could be enough to turn the market.
US property & casualty catastrophe losses by segment:
- Personal lines - $15.1bn (2010: $7.0bn)
- Commercial lines - $8.3bn (2010: $4.1bn)
- US reinsurance - $3.6 (2010: $0.8bn)