According to survey released by Moody’s Investors Service Inc. on Thursday, catastrophe losses drove net income for U.S. publicly traded property/casualty insurance companies down to $1.38 billion during the second quarter of 2011.
That was a drop of 68% from net income generated in the same quarter of 2010, according to New York-based Moody’s. Moody’s said the industry sustained pretax catastrophe losses of about $5.5 billion in the second quarter, compared with about $2 billion during the same period in 2010. May tornadoes alone caused billions of dollars in insured damage.
The report called competition for new business “intense” among insurers, although retention rates “remained strong” for most companies.
“We expect that recent catastrophe loss activity will translate into higher rates for catastrophe-exposed property coverage,” said Moody’s. “However, absent a large financial shock and/or extraordinary catastrophe losses,” such as substantial third-quarter hurricane losses, Moody’s said that it expects that pricing for commercial and specialty casualty insurers “will improve only gradually.”