New York-based insurer Tower Group Inc. said it will report a third-quarter loss from investments and Hurricane Ike totaling nearly $4 million.
The company said today that it does not expect the net effect of these items to have a material impact on its operating results for the third quarter of 2008.
Tower said it expects to record an other-than-temporary impairment and take a non-cash charge to earnings during the third quarter totaling $2.1 million, net of tax, for bonds issued by Lehman Brothers Holdings Inc. Tower added that it does not own any other Lehman securities.
Tower owned $3 million in bonds of American International Group, AIG Global Funding (Secured) and International Lease Finance Corp [another AIG subsidiary], at fair value on Sept. 30 which reflects an unrealized loss of $1 million, net of tax.
Tower said it is closely monitoring the credit situation of the issuers associated with AIG.
The company said it does not own Fannie Mae and Freddie Mac preferred stock and does not own Washington Mutual Inc. securities.
The carrier said it estimates net catastrophe losses of $700,000, net of tax, resulting from claims associated with Hurricane Ike.
During the quarter Tower said it recorded realized gains on investments of $2 million, net of tax, which includes $1.2 million, net of tax, on the sale of its investment in AgencyPort Insurance Services Inc., a privately held company that provides Web-based solutions for property-casualty insurers.
The company said it plans to report its third-quarter results on Nov. 6.
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