The property casualty insurance industry lost money on underwriting operations in 2005 but turned a profit for the year because of strong investment results, according to a trade association report.

The industry reported after-tax profits of $43 billion in 2005, an 11.7 percent increase from 2004, according to an annual report from the ISO and the Property Casualty Insurers Association of America.

But the industry posted a $5.9 billion net loss on underwriting for the year, a $10.2 billion drop from the $4.3 billion gain on underwriting in 2004.

Property losses from catastrophes doubled to $57.7 billion, a record. Hurricane Katrina alone caused $38.l billion in insured property damage. After accounting for pay-outs covered by reinsurance, residual markets and the Florida Hurricane Catastrophe Fund, the ISO estimated insurers' catastrophe losses for 2005 were between $31 billion and $36 billion, compared to $15 billion in 2004.

Insurers made up for the losses through investments gains. Income from investments rose 23.7 percent to $49.5 billion, the report said. The investments include stock dividends and interest on fixed-income interest from the instruments where insurers park capital.

Overall, net premiums written were $425.7 billion, an increase of $1.56 billion from 2004.

ISO said meteorologists cite a high likelihood of another devastating hurricane season. Rising reinsurance premiums is also making coverage more expensive for primary insurers, the report said.