An unprecedented string of catastrophes around the world—everything from the earthquake in Japan to tornadoes in Missouri—has already made 2011 the most expensive year on record for the insurance industry. But risk managers will be relieved to know that the property-casualty insurance market is still healthy, and insurance rates are likely to remain stable.

The global insurance industry suffered $265 billion in losses as of June, exceeding the $220 billion record-loss set by year's end in 2005, according to analysis by reinsurance company Munich Re. In the United States alone, nearly 100 events have produced $27 billion in overall losses and ...