According to the Insurance Information Institute, the uneventful 2006 hurricane season has led insurers to set aside billions of dollars in order to strengthen their claim-paying capacity for the next 15-20 years.

The I.I.I estimates property/casualty insurers raised its overall claim-paying resources by $55.7 billion last year, compared to the record $62 billion increase in 2003 used to recover from the effects of the terrorist attacks on September 11.

“Excellent underwriting results, the substantial drop in catastrophe losses and strong investment performance enabled insurers to reinvest billions of dollars in 2006, allowing claim-paying resources to reach an all-time record high estimated at $481.5 billion,” said Dr. Robert Hartwig, president and chief economist for the Insurance Information Institute, in a release.

The I.I.I found that the source of the reinvested funds is primarily profits earned in 2006 and investment gains as well as new capital from investors.

The I.I.I reported that insurers paid out more than $80 billion on insured losses during the 2004 and 2005 hurricane seasons. Dr. Hartwig added, “The industry is bolstering its capital position in advance of what is already predicted to be a 2007 hurricane season that is 40 percent above average.”

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Insurers Increase Claim Coffers

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