Two Cincinnati insurers and Peoria, Ill.-based RLI issued preliminary loss estimates relating to Hurricane Charley, which swept across portions of the Southeastern United States nearly two weeks ago.
Cincinnati Financial Corp. announced a preliminary estimate of about $25 million for pre-tax catastrophe losses resulting from Hurricane Charley. This figure represents the estimated losses from the fewer than 1,000 claims received through Aug. 21, as well as claims that have not yet been reported.
The hurricane affected the Cincinnati Insurance Cos.’ policyholders in Florida, North Carolina and South Carolina. As previously announced, storms in 10 states in early July also caused third-quarter catastrophe losses, now estimated at $12 million, net of reinsurance.
Based on the preliminary estimate, third-quarter catastrophe losses to date, net of reinsurance, could contribute about 5.1 percentage points to the property casualty combined ratio. The impact on after-tax earnings per share for the third quarter would be approximately 15 cents. For the third-quarter 2003 period, catastrophe losses were $41 million, contributing 6.1 percentage points to the combined ratio, with a 16-cent impact on earnings per share.
The Midland Co., a specialty insurer also based in Cincinnati, estimated Charley-related losses of $4 million through Aug. 18. The company’s CEO said in a statement that Midland’s profit outlook for the year is “virtually unchanged.”
RLI, meanwhile, has preliminarily estimated its insured losses from Hurricane Charley to fall between $3 million and $4 million on an after-tax basis, net of reinsurance. This estimate is based on the company’s claim activity to date as well as catastrophe management systems.
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