Filed Under:Markets, Reinsurance

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. 

Featured Video

Most Recent Videos

Video Library ››

Top Story

3 wise cybersecurity solutions for 2017

Human error is the leading cause of cybercrimes. Businesses may be missing out by not training their own employees in cybersecurity.

Top Story

Top 15 homeowners' insurance carriers for 2016, as ranked by NAIC

Direct premiums written among the top 25 homeowners' insurance providers totaled $91.3 billion in 2016, compared with $89 billion in 2015 and $86.7 billion in 2014.

More Resources


eNewsletter Sign Up

PropertyCasualty360 Daily eNews

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

Mobile Phone

Advertisement. Closing in 15 seconds.