EMC Insurance Group Inc., based in Des Moines, Iowa, announced that second quarter 2011 operating results will be negatively impacted by a record amount of catastrophe losses. It expects to report a second quarter 2011 operating loss in the range of $1.02 to $1.08 per share.
“Both our property and casualty insurance segment and our reinsurance segment experienced record amounts of storm losses during the second quarter,” stated Bruce G. Kelley, president and chief executive officer, in an announcement released by the company.
“Despite the unprecedented level of catastrophe losses experienced during the first six months of 2011, our balance sheet remains strong and our carried reserves continue to be in the upper quartile of the actuarial range of estimates,” he added.
The property and casualty insurance segment is expected to report storm losses of approximately $29.5 million or $1.48 per share after tax, including $14.5 million ($0.73 per share after tax) associated with April tornados in Iowa, Alabama and several other southern states; $6.4 million ($0.32 per share after tax) associated with the May tornado in Joplin, Mo.; and $5.6 million ($0.28 per share after tax) associated with June events.
The reinsurance segment is expected to report storm losses of approximately $11.5 million or $0.58 per share after tax. Losses associated with three tornado events (Tuscaloosa, Ala., Joplin, Mo., and Springfield, Mass.) were individually capped at $3.0 million ($0.15 per share after tax) under the excess of loss reinsurance agreement with Employers Mutual Casualty Co.
Based on actual results for the first six months of the year and projections for the remainder of the year, management has revised its 2011 operating income guidance from the previous range of $0.40 to $0.65 per share to an operating loss range of ($0.30) to ($0.55) per share.
The revised guidance is based on a projected GAAP combined ratio of 114.4 percent for the year.
Source: EMC Insurance Group Inc.
Topics Catastrophe Profit Loss
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