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

Liberty Mutual Group says net income increased nearly 15 percent during the first quarter when compared with the same quarter in 2010 and the insurer released a preliminary estimate from April storms in the U.S.

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

Chief Executive Officer Edmund “Ted” Kelly says Liberty Mutual based its estimate on internal preliminary reports, market share data, and the pace of claims thus far. The company came up with an insured loss estimate for the industry of about $4.9 billion, he adds.

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

In commercial lines, NWP increased 7.5 percent on a consolidated basis. Kelly said there has been some rate firming in small commercial, particularly workers compensation, but “not enough,” he adds.

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

“It is impossible to understand how the industry continues to do this to itself,” he adds. The industry keeps insuring more risk at inadequate prices, Kelly continues.