NU Online News Service, May 5, 3:11 p.m.EST

Liberty Mutual Group says net income increased nearly 15 percentduring the first quarter when compared with the same quarter in2010 and the insurer released a preliminary estimate from Aprilstorms in the U.S.

Tornado and storm activity in central states is expected tocause $350 million to $450 million in catastrophe losses, thecompany says during a conference call.

Chief Executive Officer Edmund “Ted” Kelly says Liberty Mutualbased its estimate on internal preliminary reports, market sharedata, and the pace of claims thus far. The company came up with aninsured loss estimate for the industry of about $4.9 billion, headds.

During the first quarter net written premiums written increased$374 million, or 5.2 percent, compared with the same period a yearago. Net written premiums in the homeowners lines of businessincreased 8.4 percent, as the industry shows “more pricingdiscipline,” says Kelly. However, as evidenced by the April storms,pricing is still not adequate, he adds. Auto NWP increased 4.6percent.

In commercial lines, NWP increased 7.5 percent on a consolidatedbasis. Kelly said there has been some rate firming in smallcommercial, particularly workers compensation, but “not enough,” headds.

As a whole the industry is writing workers compensation to acombined ratio of about 120, with no “meaningful improvement inpricing,” Kelly says.

“It is impossible to understand how the industry continues to dothis to itself,” he adds. The industry keeps insuring more risk atinadequate prices, Kelly continues.