The Texas insurance industry lost nearly $1.4 billion in 2008 as the state was hammered by three hurricanes as well as several other major weather events.
According to figures released Monday by the Texas Department of Insurance, for every dollar the state's insurance industry took in it paid out $1.65.
"It was a tough year for the industry after several profitable years," said Ben Gonzalez, a spokesman for the Texas Department of Insurance. "These things balance out. There are good years and bad years."
But 2008 proved to be a particularly bad year, with a hurricane season that was devastating for many parts of Texas as three major storms made landfall.
Dolly hit the Texas-Mexico border in July. Gustav slammed the Texas-Louisiana line on Labor Day. Ike, the most destructive of the three hurricanes, barreled ashore near Galveston on Sept. 13, wreaking havoc throughout Southeast Texas.
State officials estimate damages from last year's hurricane season to be more than $29 billion.
Ike and Dolly resulted in nearly 1 million insurance claims alone, said Mark Hanna, a spokesman for the Insurance Council of Texas,
"Throwing (in) all of the severe thunderstorms in North and Central Texas last spring, you can see why weather played such a pivotal role in homeowners insurance in Texas," he said. "We can be thankful Texas had a string of good years prior to 2008 so that the industry was able to meet its financial obligations in the aftermath of these weather related catastrophes."
The Texas Department of Insurance data showed that while the industry earned nearly $5.2 billion in premiums, it had losses of nearly $6.6 billion.
Data also showed the industry had an incurred loss ratio (which is the percentage of losses versus the premiums collected) of 127 percent. Hanna said anything under 65 is profitable for the industry.
Data also showed the industry had a combined loss and expense ratio (which takes into account a company's expenses for agent commissions, overhead and administrative costs) of 165 percent. Anything over 100 percent and the industry loses money, Hanna said.
The last time those two ratios were over 100 percent was in 2002, when the state was dealing with billions of dollars in mold-damage claims.
But Alex Winslow of Texas Watch, a consumer group active in insurance issues, called the data incomplete and misleading because it did not include something called reinsurance recoveries, which is basically insurance for insurance companies.
"This data has more holes than a block of Swiss cheese," Winslow said. "TDI fails to consider significant reinsurance recoveries, which will lower the industry's losses; uses an inflated loss number that does not reflect actual claims paid after the insurance industry employs its well-documented deny, delay, and underpayment tactics; and focuses on the combined loss ratio, which includes industry expenses like bloated overhead expenses, CEO salaries, and fat agent commissions that consumers shouldn't have to pick up the tab for."
Texas historically has been among the most expensive for home insurance. Industry officials blame Texas' unpredictable weather, which includes hurricanes, hailstorms and tornadoes. The rash of mold claims several years ago also drove up rates.
Gonzalez had no comment on Winslow's statement.
"The reinsurance issue is a very weak way of attacking the fact that Texas had a horrendous year," Hanna said. "The industry, despite all this damage, despite all these claims, did a tremendous job of handling these claims."
Hanna said more than 90 percent of claims from Hurricane Ike have been paid and out of the nearly 800,000 claims filed as a result of that disaster, there have been only 1,500 complaints filed.
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