This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Despite Sandy, Insurers Keep Improving During 2013

Stocks in this article: AIGALLBRK-BTRVCB

NEW YORK ( TheStreet) -- Property and casualty insurers are improving their core businesses, as industry damage payouts decline and premium prices move higher.

As part of TheStreet's series on the one year anniversary of the disastrous arrival of Hurricane Sandy in the Northeast, we have reviewed the earnings and core insurance underwriting performance of the five publicly traded U.S. property and casualty (P&C) insurers with the largest Northeast market shares, and found vast improvement.

According to the Insurance Information Institute, total insurance losses from catastrophes in the United States during 2012 came to $35 billion, with $18.75 billion in losses from Hurricane Sandy. The 2012 loss total increased from $33.6 billion in 2011.

During the first half of 2013, U.S. insured catastrophe losses totaled $9.7 billion, declining sharply from $14.4 billion a year earlier. To offer some perspective on what that figure means, the 10-year average for U.S. insured catastrophe losses over the past 10 years is $9.2 billion, according to ISO, a subsidiary of Verisk Analystics (VRSK).

So the first half of 2013 can be considered somewhat "normal," while "the third quarter of 2013 did not bring any major catastrophes," according to Insurance Information Institute president and economist Robert Hartwig. In his organization's assessment of first-half results for the P&C insurance industry, Hartwig wrote that "historically, the third quarter is the most costly in terms of catastrophe losses. Hurricane activity remained subdued and far below expectations for an active season."

2013 is shaping up to be a very good year for the industry, as long as we don't see any fourth-quarter hurricane surprises. But these events are beyond the industry's control. The real story for investors is the development of underwriting profits, with "continued and steady premium growth," according to Hartwig.

When asked how the insurers are creating a better underwriting pricing environment (at least for them), Hartwig says "we are in the midst of a trend with rates continuing to move up modestly across most types of P&C coverage. That includes homeowners and commercial property insurance which, of course, has been affected by catastrophe losses, but also auto insurance and workers compensation.'

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs