Travelers Companies, reportedly the second largest Commercial Insurance Company in the United States, recorded its third decline in Quarterly profits in a row due to "the record number of tornadoes in the second quarter." Andrew Frye, "Travelers Net Income Drops 25 Percent on Catastrophes (Update 5)" (Bloomberg.com, Wed., July 23, 2008). It is reported in this article that 2Q 2008 provided the most tornadoes in the second quarter of the fiscal year since the National Weather Service started counting in 1950.
It is also reported in the article, although not as a cause of The Travelers' reported decline in profits, that the Commercial Insurance Industry has competitively cut Premiums to gain large corporate Policyholders. The Council of Insurance Agents and Brokers is credited in the article with a report of its own that Premium Rates for the largest Commercial Insurance accounts fell 16% in 2Q 2008, and overall, Commercial Insurance Premiums were down 13% in the quarter.
Allstate Corporation also reported that its falling profit continued a streak, in Allstate's case for the fourth quarter in a row. Allstate astonishingly reported that compared to 2Q 2007 one year ago, its net income fell 98% in 2Q 2008, a result it blamed on tornadoes. In addition, Allstate pointed to its investment losses due to writedowns resulting from the failing economy and the credit crisis, i.e., the downgraded collateral it took back to secure its investments. Erik Holm, "Allstate Profit Falls on Tornadoes, Investment Loss (Update 3)" (Bloomberg.com, Wed., July 23, 2008).
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