U.S. insurance sales rise for first time in 13 quarters

U.S. property and casualty insurance sales gained for the first time in 13 quarters, as carriers including Allstate Corp. raised rates to counter catastrophe costs and the slowdown in demand that began in 2007.

Second-quarter policy sales rose 1.3 percent to $107.6 billion from $106.2 billion in the year-earlier period, the Property Casualty Insurers Association of America said today in a statement.

Carriers are raising rates for some individuals after commercial clients including builders and manufacturers scaled back coverage in 2008 and 2009. Northbrook-based Allstate, the largest publicly traded U.S. home and car insurer, benefited from a 6.1 percent average premium increase from residential customers, the company said in a conference call last month discussing second-quarter results.

"We expect to continue to seek rate changes where necessary to improve the returns," said Robert Block, vice president of investor relations, in the call.

An economic recovery may also be increasing demand. Warren Buffett, chief executive officer of Berkshire Hathaway Inc., which sells insurance through units including Geico and General Re, said this week that "I see our businesses coming back almost across the board."

The world's largest economy grew at a 1.6 percent annual pace in the second quarter, exceeding the median forecast of economists surveyed by Bloomberg News, revised figures from the Commerce Department showed on Aug. 27.

"You can also see that exposure has been modestly increasing with the economic recovery," said Jay Benet, chief financial officer of Travelers Cos., the insurer in the Dow Jones Industrial Average., in a conference call this week.

Catastrophes striking the U.S. in the first six months of the year caused $7.9 billion in insured losses this year, up about $200 million from the prior-year period, according to the statement.