Zachary Tracer
Bloomberg News

Allstate Corp. is leading property and casualty insurers to the best financial start since 2003 amid a decline in tornadoes and forecasts for fewer major hurricanes.

Twisters killed six people from April 1 to May 28, compared with 541 deaths in the two months last year, the U.S. National Weather Service said.

Insured losses from severe weather in the U.S. were about $1 billion last month, lagging behind losses of roughly $16 billion from tornadoes and other severe weather in April and May of last year, broker Aon Plc estimated.

Insurers that raised prices after last year’s disasters are gaining as the cost of claims drops. Allstate’s net income jumped to the highest since 2007 in the first quarter and operating profit at New York-based Travelers Cos. beat analysts’ estimates. Companies could benefit further as forecasters predict a below-average Atlantic hurricane season, which officially begins Friday.

“Companies are enjoying pretty good rate increases, which is a byproduct of the amount of losses that they took last year,” said Mark Dwelle, an analyst at RBC Capital Markets. “Combine relatively higher rates with at least so far modest to manageable losses, it leads to a reasonable expectation” of better results.

The Standard & Poor’s 500 Property & Casualty Insurance Index advanced 6.6 percent since Dec. 31 after declining in the same period five of the last nine years.

Allstate, the largest publicly traded U.S. home and auto insurer with 1,200 employees in office operations in Summit County, jumped 25 percent this year and Travelers climbed 6.3 percent, compared with a 6 percent gain in the S&P 500.

The National Oceanic and Atmospheric Administration projects one to three major hurricanes in the six-month Atlantic season, according to a May 24 statement. An average year has three major hurricanes, defined as those with top wind speeds of 111 miles per hour or more.

Four major hurricanes formed last year, including Irene, which lashed the U.S. East Coast in August and caused flooding in Vermont and western Massachusetts. The storm resulted in about $15.8 billion in damages, including $4.3 billion incurred by private insurers, according to U.S. government estimates.

Allstate boosted homeowners’ rates after the insurer faced $3.8 billion in claims costs tied to natural disasters in 2011. It booked $259 million in catastrophe costs in the first quarter, compared with $333 million a year earlier. April catastrophe losses were about $280 million, down from $1.4 billion a year earlier. Rates rose an average of 7.9 percent in the 13 states where Allstate received permission to boost premiums, Robert Block, vice president of investor relations, said on a May 3 conference call.

Travelers, the lone insurer in the Dow Jones industrial average, said it raised prices after last year’s disasters by about 10 percent for homeowners’ coverage and has requested further increases from regulators. Catastrophes cost the firm $168 million in the first quarter, 9.7 percent less than a year earlier.

“Given the potential for continued unusual weather patterns, we are going to continue to take the actions we believe are necessary to improve returns,” President Brian MacLean said in an April 19 statement.

Last year’s natural disasters included a May 22 tornado that tore through Joplin, Mo., killing more than 125 people, as well as deadly twisters in Tuscaloosa, Ala., and Springfield, Mass. The 2011 tornado season was the third most active since 1980 with more than 1,550 confirmed storms, according to CoreLogic Inc., a Santa Ana, Calif.-based data provider. The storms contributed to second-quarter losses in 2011 for Allstate and Travelers.