Hartford Sandy Losses Could Exceed $350M

Correction: Dec. 7, 10:59 p.m. EST

The Hartford’s chief executive says that its insured losses for Superstorm Sandy could surpass its reinsurance deductible of $350 million.

In a presentation yesterday at the Goldman Sachs Financial Services Conference, Liam McGee, chairman, president and CEO of The Hartford Financial Services, told attendees that the company “is taking longer than usual” to issue a loss estimate “due to the volume and nature of business interruption claims.”

He says the losses will be manageable for the company, and that while work on claims is not complete, “it is possible that gross losses will hit our reinsurance deductible of $350 million.”

The company’s reinsurance program, he says, requires the company to retain 10 percent of loss over $350 million.

“We will update you as soon as we finalize the loss estimate, based on projected claims and average costs,” says McGee.

In terms of dollars, about 60 percent of the claims will be in the commercial lines and 40 percent personal lines, says McGee, with close to half of the commercial losses coming from business interruption claims.

He says Sandy will “cause us to re-look at risk management and models, particularly in property.”

The industry, McGee suggests, will have to deal with “the fact that undoubtedly weather has changed.” The company has increased its catastrophe loads from 2011 to 2012 and it will probably do the same next year.

“Whether it’s global warming, climate change, I think as an industry we have to assume that is a new normal and we’ll run our business consistent with that,” says McGee.

Correction: The claim percentage cited by McGee for commercial and personal lines was dollar amount not number of claims. 


Resource Center

View All »

Complimentary Case Study: Helping achieve your financial goals By:...

Find out how a Special Investigation Union used TLOxp to save the company money and...

Do Your Clients Hold The Right CDL License?

Learn about the various classes of CDL Licenses and the industries that are impacted by...

Integrated Content & Communications: A Key Business Issue For Insurers

Insurers are renewing their focus on top line growth, and many are learning that growth...

High Risk Insurance Coverage in the E&S Market

Experts discuss market conditions, trends and projected growth in a rapidly changing niche.

Top E-Signature Security Requirements

This white paper covers the most important security features to look for when evaluating e-signatures...

EPLI Programs Crafted Just For Your Clients

Bring us your restaurant clients, associations and other groups and we’ll help you win more...

Is It Time To Step Up And Own An Agency?

Download this eBook for insight on how to determine if owning an agency is right...

Claims - The Good The Bad And The Ugly

Fraudulent claims cost the industry and the public thousands of dollars in losses. This article...

Leveraging BI for Improved Claims Performance and Results

If claims organizations do not avail themselves of the latest business intelligence (BI) tools, they...

Top 10 Legal Requirements for E-Signatures in Insurance

Want to make sure you’ve covered all your bases when adopting e-signatures? Learn how to...

PropertyCasualty360 Daily eNews

Get P&C insurance news to stay ahead of the competition in one concise format - FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.