The U.S. property/casualty (P/C) insurance industry turned in a weak performance during the first half of 2011, as profitability slumped amid high catastrophe losses, according to I.I.I. president Dr. Robert Hartwig.

In his commentary on the industry’s first-half 2011 results, Dr. Hartwig notes:

In the United States at least $30 billion in economic losses, $19.7 billion of which was insured, helped depress the P/C insurance industry annualized statutory rate of return on average surplus to 1.7 percent during the first half of 2011, down from 6.4 percent in the first half of 2010 and 6.5 percent for all of last year.”

Dr. Hartwig goes on to explain that Hurricane Irene, which caused an estimated $3 billion to $4 billion in insured losses during the third quarter, along with a slew of other catastrophes, will likely push the year-to-date tally above the $25 billion mark.

Despite the slump in P/C insurance profitability, there was some good news.

Premium growth remained positive (2.6 percent in first half), investment earnings were more robust than anticipated (net investment gains up 10 percent to $28.4 billion in first half) and policyholders’ surplus remained near its all-time record high ($559.1 billion as of June 30, 2011).

Still, Dr. Hartwig concludes:

The outlook for the remainder of the year is a cautious one given continued high third-quarter catastrophe losses, the prospect of high underwriting losses associated with non-cat losses and more uncertainty in the investment markets.”

The industry’s results were released Friday by ISO and the Property Casualty Insurers Association of America (PCI).