MetLife’s Q3 Catastrophe Losses at Least Twice as High as Expected

MetLife is the latest insurer to report major losses from Hurricane Irene and other severe storms this year, with the coverage provider this week estimating $80 million to $100 million in after-tax catastrophe losses on auto and homeowner policies in the third quarter of this year.

That is $42 million to $62 million higher than the company’s expected catastrophe losses of $38 million for the quarter.

The figures were reported in a Securities and Exchange Commission filing submitted Thursday. MetLife plans to announce its third-quarter earnings after the stock market closes on Oct. 27.

The announcement arrives on the heels of major catastrophe losses reported by other insurers—including State Farm, Progressive and Allstate—and industry experts.

According to the Insurance Information Institute (III), auto, home and business insurers paid out nearly $25 billion in catastrophe claims through the first nine months of 2011.

Catastrophic weather events including tornadoes and floods in just the first half of the year—before Irene and other disasters—caused an estimated $27 billion in damages nationwide, according to III.

The insurance industry typically defines a catastrophe as an event that causes $25 million or more in insured property losses and affects a significant number of policyholders and coverage providers, according to III.

State Farm announced last month it had paid out $5 billion on more than 970,000 weather-related claims as of Sept. 23. The payments will go to help rebuild homes and replace vehicles for New Jersey auto insurance and homeowner policyholders and State Farm customers in other states ravaged by severe weather.

Progressive announced that it lost $37 million to catastrophes that occurred in August, decreasing the company’s profits by 66 percent compared with the same month the previous year. The company’s catastrophe losses in the same month in 2010 were only $2.2 million.

And Allstate reported $735 million in catastrophe losses in August, including about $500 million from Tropical Storm Irene. The company said its estimated pretax losses from Irene and seven other storms in July and August added up to $865 million.

Allstate reported $2.3 billion in losses from tornadoes, wildfires and wind and hailstorms in the second quarter of 2011.

For information on the customer service track records of MetLife and other companies, readers can research user-submitted car insurance reviews online.


About Gregor McGavin
Gregor McGavin is an award-winning journalist who has reported across the country for such publications as The Associated Press, the Arizona Republic, the Pittsburgh Tribune-Review and the Press-Enterprise.

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