Charley Costs Keep Building
By Mark Ruquet
NU Online News Service, Sept. 1, 3:26 p.m. EDT?Allstate Corp. said losses from Hurricane Charley are estimated to be approximately $425 million, and the St. Paul Travelers Companies said it figures its losses from the storm will be approximately $140 million.[@@]
The Allstate estimate includes losses on Florida personal lines auto and property policies, net losses on commercial policies, and a low level of losses experienced in North and South Carolina.
The losses would amount to $276 million after taxes, or 40 cents per share. The company said it has received 55,600 claims from the storm.
The St. Paul Travelers $140 million estimate is after tax and reinsurance, the St. Paul, Minn.-based company said. It said the business segments affected include:
? Commercial lines?approximately $79 million.
? Specialty lines?approximately $35 million.
? Personal lines?approximately $26 million.
The Insurance Services Office claims division, Property Claims Services, has placed losses for the industry at $6.8 billion, making it the second costliest hurricane next to Andrew, which struck South Florida in 1992 causing $20.3 billion in losses. PCS said it would be taking another survey of claims losses in 60 days after more claims are filed and amended.
Meanwhile, the A.M. Best Co. rating firm in Oldwick, N.J., said it had placed State Farm Florida under review.
Best said although State Farm Florida was established as a separate entity within the State Farm Group, Bloomington, Ill., and rated separately by A.M. Best, operations and the rating have historically reflected both the implied and actual support of its parent, State Farm Mutual Automobile Insurance Company.
Best said the parent firm support is particularly evident in its extensive catastrophe reinsurance program, with significant protection provided by State Farm Mutual.
The rating firm said that while the gross losses associated with Hurricane Charley are significant, the reinsurance program has reduced State Farm Florida's net considerably, and Best is concerned about State Farm Florida's risk-adjusted capitalization.
As Hurricane Frances loomed offshore, Best said it had concerns with the company's ability to absorb a subsequent catastrophic event as it relates to its current rating. Accordingly, continuation of the current rating is contingent upon additional support from State Farm Group with regards to improving State Farm Florida's capitalization.
Separately, Standard & Poor's said it is affirming its "double-A" ratings for State Farm companies and its "double-A-minus" rating for State Farm Lloyd's, with a stable outlook for all.
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