Pennsylvania-based insurer Harleysville said severe winter storms over the last few months will hurt its first quarter profits.
“We experienced unusually severe winter weather throughout much of the Mid-Atlantic and Northeast, especially in New England and New York,” said CEO Michael Browne. “The number of events—coupled with their frequency and closeness to one another in time—combined to produce elevated catastrophe and non-catastrophe claims activity throughout commercial and personal lines. We saw an abnormal increase in water damage, ice dams, roof collapses and fire losses in property, automobile claims, and weather-related casualty losses.
“This extreme weather resulted in significant disruption and financial loss for a large number of our policyholders,” he added.
Catastrophe losses will reduce diluted operating income by $0.21 per share. Harleysville said its combined ratio will reflect significant winter losses not meeting the catastrophe definition, as well as 4.5 points of catastrophe losses for the quarter. In the year-ago quarter, Harleysville has statutory combined ratio of 107.8, which included 10 points of catastrophe losses. Both years’ catastrophe losses exceed the company’s long-term average.
New York-based Tower Group also said the region’s storms will impact its first quarter results. Towere estimated losses will be in the range of $6.5 million to $9.8 million after tax, or $0.16 to $0.23 per diluted share
Harleysville Group is scheduled to release its results on Tuesday. Tower Group is scheduled to release its earnings on May 9.