Columbus, Ohio-based State Auto Financial Corporation said it estimates second-quarter losses from 16 catastrophic storms could exceed $80 million.
The company said preliminary calculations put the expected loss for the period between $76- and $84 million in pretax catastrophe losses. It said the above range includes $3.4 million related to adverse development from prior periods.
STFC Chairman, President and Chief Executive Officer Bob Restrepo said in a statement: "Unfortunately, the unusually harsh storm activity we saw in the first quarter of this year has continued into the second quarter. This heightened level of storm activity will contribute higher than normal catastrophe losses to STFC's second-quarter 2008 results."
The projected loss could be triple what the insurer has experienced in the past five years for second-quarter pretax catastrophe losses, which have averaged $27.6 million and last year amounted to $20.7 million.
Mr. Restrepo reported that "during second-quarter 2008, the company experienced losses from 16 different storms that were classified as numbered catastrophes by ISO. This uncommon catastrophe activity has impacted 26 of our 33 operating states."
"For the first half of 2008, the company experienced losses from a total of 24 classified catastrophes, as compared to 18 and 23 for all of 2007 and 2006, respectively."
He said the events have challenged the company's claims staff, but "they have performed exceptionally well, providing our policyholders the outstanding service they expect from State Auto during difficult times."
STFC said it plans to release final second-quarter 2008 financial results July 24, followed by a conference call at 10:00 a.m. Eastern time to discuss the company's second-quarter performance. Live and archived broadcasts of that conference call will be posted on www.StateAuto.com.
The company is a super-regional property and casualty insurance holding company marketing personal and business insurance products exclusively through independent insurance agencies in 33 states.
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