NU Online News Service, March 7, 1:00 p.m. EST

Net income at American Family Insurance Group fell more than 39 percent for the year on record losses from catastrophe claims.

Net income in 2011 for the Madison, Wis.-based insurer was $295.2 million, compared to $487.1 million in 2010.

The mutual insurance company paid a record $1.2 billion in catastrophe claims during 2011, mostly from Midwestern wind and hail storms in April and May that generated $650 million in claims.

These storms included a devastating tornado in Joplin, Mo. on May 22 that resulted in $125 million in claims payouts. A four-day span in late May spawned wind, hail and tornadoes that caused more than $210 million in payments to the insurers' policyholders in Illinois, Indiana, Kansas, Minnesota, Missouri and Wisconsin.

Catastrophes were primarily to blame for American Family posting a property and casualty underwriting loss of $322.2 million in 2011 compared to a gain of $12.2 million in 2010. The P&C business finished 2011 with a 106.1 combined ratio.

Net premiums written fell to $5.2 billion, a 3 percent decline from 2010.

Still, American Family says policyholder equity was $5.7 billion at the end of 2011 compared to $5.4 billion at the end of 2010.

Special Reports /

American Family Yearly Income Falls 39% on Record Catastrophe Claims

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