P&C Insurers Face Above-Normal Tornado Expectations In 2012 (ALL, PGR, BRK.B)

Before you hit the panic button too hard, ask yourself just how accurate you think the weatherman is.  All cynical thinking aside, AccuWeather.com is calling for an above-normal year of tornado activity in 2012.  This is on the heels of what was nearly a record year in 2011.  In 2011, there were 1,709 tornadoes and the record is said to be 1,817 back in 2004.

There is an obvious observation… Living in a trailer might bring on some added risks in 2012.  So far the report is not causing any panic in the property and casualty insurers:

Allstate Corporation (NYSE: ALL) is flat at $31.39 against a 52-week trading range of $22.27 to $34.40.  Berkshire Hathaway Inc. (NYSE: BRK.B) is even up modestly and it has exposure on insurance and on reinsurance.  Progressive Corporation (NYSE: PGR) is also up 0.4% at $21.52.

Maybe the obvious answer is that ‘above average’ means that insurers will get to charge more than normal as well.