Argo, Penn Millers Report Cat Losses

NU Online News Service, Oct. 26, 12:24 p.m. EDT

Argo Group says its total third-quarter catastrophe losses could amount to $40 million while Penn Millers says its losses could exceed $3 million.

Hamilton, Bermuda-based Argo Group International Holdings, Ltd. says it expects to report catastrophe losses and other severe weather activity of approximately $35 million to $40 million.

The figure is net of reinsurance and reinstatement premiums.

The estimate includes approximately $20 million of losses related to Hurricane Irene and the Danish floods and approximately $10 million of loss from aggregate reinsurance covers relating to exposures in the Midwestern United States.

Argo cautions that the figures are preliminary and that the “ultimate cost to the company from these events may differ materially from the foregoing estimates.”

It also says that an annual review of its asbestos and environmental reserve resulted in an expected increase of approximately $10 million on a pre-tax basis.

“The review entails a detailed analysis of our direct and assumed exposure and reflects management's best estimate of the company's ultimate exposure,” Argo says.

Wilkes-Barre, Pa.-based Penn Millers Holding Corp. issued an estimate of its incurred pre-tax catastrophe losses and loss adjustment expenses, net of reinsurance, will be approximately $3.4 million in the third quarter.

The majority of the loss is related to Hurricane Irene, which accounted for $2.4 million.

The remaining catastrophe losses were mostly attributable to various flooding, hail, and wind events in the Midwest.  

The weather related losses will cause Penn Millers to incur a loss from operations for the third quarter, it says.

Penn Millers provides property and casualty insurance provides agribusiness insurance and commercial lines insurance in 34 states through Penn Millers Insurance Co.