NU Online News Service, Oct. 21, 1:13 p.m. EST
EMC Insurance Group Inc. says a record amount of catastrophe losses will negatively impact operating results for the third quarter.
The property and casualty insurer/reinsurer expects $19.3 million in after-tax, third-quarter catastrophe losses, the company says in a statement.
Despite what Bruce G. Kelly, president and chief executive officer, calls "unprecedented" level of cat losses, the company's balance sheet "remains strong and our carried reserves continue to be in the upper quartile of the actuarial range of estimates," he says.
About $8.5 million in losses can be attributed to three Midwest hail/wind storms.
About $6 million in third-quarter losses is from increased estimates on second-quarter catastrophe losses, EMC adds.
The Des Moines, Iowa-based company reports a $12.5 million loss for the second quarter, as catastrophe losses were about $41.1 million. Its combined ratio for the period was nearly 133.
Hurricane Irene is expected to comprise about $1.7 million of the total $7 million catastrophe loss expected in EMC's reinsurance segment, it says. Texas wildfires are to blame for $1 million in losses to the segment and the Midwest storms could account for about $900,000 in losses to the segment.
"Through the first nine months of 2011 we have incurred approximately $3.86 per share of catastrophe losses, far exceeding our previous full-year record of $2.52 per share set in 2008," says Kelley.
EMC says it projects a combined ratio of 115.2 for the year.
The industry's third-quarter earnings look to be hit hard by catastrophe losses. Allstate Corp. says it expects to take nearly $1.1 billion in pre-tax third-quarter catastrophe losses and Travelers has announced Travelers Cos. its third-quarter net income dropped 67 percent primarily due to $606 million in pre-tax catastrophe losses.
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