Property/casualty insurer Cincinnati Financial Corp. announced an estimate of $8 million for pretax catastrophe losses resulting from Hurricane Jeanne and updated estimates for prior storms. Including Jeanne, third-quarter pretax catastrophe losses, net of reinsurance, now are estimated at $94 million.
The impact of these claims on the third-quarter P/C combined ratio, after an $11 million reinsurance reinstatement premium, would be about 13 percentage points. Earnings per share (after tax) would be reduced by approximately 40 cents
The loss estimate for each event includes losses from claims received as well as updated estimates of claims that have not yet been reported. The company now anticipates losses before reinsurance from Hurricane Ivan of more than $90 million.
The company’s reinsurance coverage protects against catastrophic events such as wind and hail, hurricanes or earthquakes. Under the 2004 reinsurance program, the company retains the first $25 million in losses arising from a single event and 43 percent of losses from $25 million to $45 million. The company retains only 5 percent of losses between $45 million and $500 million.
To restore affected layers of the property catastrophe reinsurance program following Ivan, the company incurred a reinsurance reinstatement premium in the third quarter. While the company participates in wind pools in Florida and other affected states, it has received no information on which to develop estimates of any potential assessments.
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