Meadowbrook Says 2Q Losses Amount to $12M

NU Online News Service, July 14, 11:55 a.m. EDT

Meadowbrook Insurance Group Inc. says its second-quarter results will include higher-than-average storm-related losses, net of reinsurance, of approximately $12.5 million pre-tax.

The Southfield, Mich.-based carrier says the amount is approximately $6.3 million pre-tax higher than normal, and that the losses will add 3.5 percentage points to the combined ratio and reduce earnings per share by approximately 8 cents per share in the quarter.

“Our underwriting approach to property exposures focuses on spread of risks, avoiding those areas most frequently exposed to severe weather and maintaining a low catastrophe-reinsurance retention level,” says Meadowbrook President and CEO Robert S. Cubbin in a statement. “None of the storms this quarter were severe enough to trigger our catastrophe-reinsurance program as no single event resulted in losses greater than $2.4 million.”

“That said, the frequency of storm losses was very high, with 12 ISO-designated storms occurring during the quarter,” he says. “The cumulative effect of the storms led to this greater-than-usual loss for us in the quarter. Our relatively lower-than-industry exposure to property catastrophes reduced our potential for even greater losses despite the significant number of severe storms that devastated many parts of the country.”