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

Net income at American Family Insurance Group fell more than 39percent 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 incatastrophe claims during 2011, mostly from Midwestern wind andhail storms in April and May that generated $650 million inclaims.

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

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

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

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