3Q Earnings: Catastrophes Continue
to Plague Insurers’ Results
BY CHAD HEMENWAY AND MARK E. RUQUET
THIRD-QUARTER results are rolling in, and the theme remains the same as it has been throughout the year: Catastrophe losses are dragging down profits.
Allstate Corp. says 2011 third-quarter
net income dropped 55 percent to $165
million on about $1.1 billion in catastrophe
losses from 23 loss events. The Northbrook,
Ill.-based insurer posted 2010 third-quarter
net income of $367 million, during which
it took catastrophe losses of $386 million.
Catastrophes during this year’s third
quarter, including Hurricane Irene and
Tropical Storm Lee, contributed 16. 7
points to the company’s property-liability
combined ratio of 104.8—an increase of
8. 9 points from Allstate’s combined ratio
during the third quarter a year ago.
W.R. Berkley Corp. says its third-quarter net income was down 18.1 percent
to $77 million, compared to $94 million
during the same period a year ago.
Catastrophe losses were $51 million
during the third quarter compared to $22
million during the same time in 2010.
Net income for the first nine months
is down 14 percent for the company, to
about $276.9 million. For the first nine
months of 2011 and 2010, catastrophe
losses were $139 million and $75 million,
respectively, the commercial insurer says.
Chicago-based specialty insurer CNA
Financial Corp. reports third-quarter net
income of $75 million, compared to a net
loss of $140 million a year ago.
Though net written premiums grew 8 percent, the company’s property-and-casualty operations saw $32 million in after-tax catastrophe losses and net-realized investment results
decreased $56 million to a loss of $16 million
compared to the 2010 third quarter, CNA says.
Net operating income increased to $91
million from a loss of $158 million a year
ago when CNA sold its legacy asbestos and
environmental-pollution liabilities to Berk-
shire Hathaway’s National Indemnity Co.
was down 27.3 percent to $96 million
compared to the same time a year ago.
Bermuda-based insurers and reinsurers
also report catastrophe-impacted results
for the quarter.
Everest Re says third-quarter net income
dropped 64 percent to $63 million compared to a year ago, driven mainly by $119
million in catastrophe losses. The losses
include $35 million for Hurricane Irene
as well as increased loss estimates on first-quarter losses related to the earthquakes in
Japan and New Zealand.
In the 2010 third quarter, the company
reported $89 million in catastrophe losses.
Montpelier Re says it took a third-quarter net loss of $66 million, compared to net
income of $90 million a year ago. The company saw $60 million in catastrophe losses,
with $30 million coming from Hurricane
Irene, Texas wildfires and other U.S. events.
Endurance Specialty Holdings says it
took a $20 million loss in the quarter
compared to net income of $139.1 million
a year ago, driven by catastrophe losses of
$91.1 million in its reinsurance segment.
The cat losses account for 37.6 points to the
reinsurance segment’s 115 combined ratio.
Aspen Insurance Holdings says third-quarter net income was $22.2 million, a
76.1 percent drop from a year ago. The
company saw $55 million in losses from
third-quarter catastrophes and adjustments
to previous losses.
Validus Holdings says net income fell
76.3 percent to $56.5 million in the quarter.
Losses from weather and other events for the
quarter were $51.9 million, which caused a
$47.9 million decrease to net income.
Rounding out the Bermuda companies,
Arch Capital Group Ltd. saw a 14.75 percent
increase in third-quarter net income, to
$162.5 million, despite catastrophe losses of
$59.6 million, net of reinsurance and reinstatement premiums. NU