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Catastrophe losses batter property/casualty insurers in first quarter

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Increased catastrophe losses helped drive U.S. property/casualty insurers' net income for the first quarter of 2016 down 26.6% from that of the same period a year earlier to $13.31 billion, according to a study released Thursday by Verisk Analytics Inc.'s ISO unit and the Property Casualty Insurers Association of America.

Net written premium grew 3.2% to $130.07 billion, a slowdown in growth from the 3.8% growth rate registered in the first quarter of 2015.

Insurers' net investment income, which consists primarily of stock dividends and bond interest, fell 6.6% during the first quarter of 2016 compared with the corresponding quarter in 2015 to $10.89 billion. Insurers also sustained a 51.3% drop in realized capital gains, which fell to $2.29 billion.

The report said that direct insured property losses from catastrophes striking the United States totaled $4.8 billion in the first quarter of 2016, up $1.2 billion from $3.6 billion in the first quarter of 2015 and $1.7 billion above the $3.1 billion average first-quarter direct catastrophe losses for the past 10 years.

It noted that from 1950 through 2015, the only time first-quarter direct catastrophe losses exceeded $4 billion was in 1994, when insurers dealt with $12.5 billion in losses from the Northridge earthquake in California.

Severe weather across the South, including hailstorms, made a significant contribution to the increased catastrophe losses in this year's first quarter.