BAD weather pushed up the size of property insurance claims by over 50 per cent last year, according to the Irish Insurance Federation. The members of the federation paid out on claims totalling £214.6 million in 1995, compared to £139.2 million in the previous year.

A series of storms and floods during the year was primarily responsible for the increase. In January 1995 alone there were more than 5,000 weather related claims that cost members of the IIF over £9 million, according to figures compiled by the federation.

The profitability of the sector dropped dramatically as a result of the increased claims. Insurers made a combined profit of only £5 million on property underwriting in 1995, compared to £62 million in 1994, according to the IIF.

The poor results in 1995 will not necessarily lead to an increase in premiums, according to Ms Nessa O'Mahony, spokesperson for the IIF. Insurance companies tend to take a long term view of the sector and would not put up premiums after only one bad year, she explained.

The property sector is much less reactive than the motor sector," she commented.

The previous year, 1994, was a good year for property insurers, but much would depend on the outcome for 1996 as two bad years in a row would put pressure on premiums, she said.

Overall, insurance companies took in £1.28 billion in premiums in 1995 from property, motor, liability and other types of non-life insurance. This was an increase of 5 per cent on 1994 but was offset by a 10 per cent increase in total claims to 1.04 billion. The gross underwriting result the profit or loss after claims and expenses are deducted was a loss of £47 million, compared to a £14.7 million the previous year.

Underwriting losses in the motor sector improved from £56.6 million to £40.02 million. Premium income increased from £624.9 million to £650.4 million while claims increased from £561.9 million to £568.2 million.

Losses in the third major sector, liability insurance, continued to deteriorate, according to the IIF. Although premium income increased by 7.7 per cent to £230.3 million, claims grew by 11.5 per cent to £225.9 million.

"The gross underwriting loss is now larger for liability insurers than for motor insurers, despite the fact that motor insurers write three times as much business (in premium terms) as liability insurers," according to the IIF.