The Cincinnati Insurance Companies’ property casualty group expects its second-quarter results to include pre-tax catastrophe losses, net of reinsurance, of approximately $150 million to $200 million incurred due to the more than 9,000 claims from policyholders who reported losses due to April catastrophes.
Steven J. Johnston, president and chief executive officer, commented, “Over the past 10 years, the impact of catastrophes on our second-quarter loss ratio has averaged 8.5 percentage points compared with a full-year average of 4.4 points. The impact of April 2011 catastrophe losses on our second-quarter loss ratio would be approximately 21 to 28 percentage points, net of reinsurance and based on estimated earned premiums for the full second-quarter.
The tornado outbreak in late April caused losses exceeding $45 million, which is the amount of loss we retain for a single catastrophic event before our reinsurers cover further losses. We expect recovery from our reinsurers of significant losses incurred above our retention level.
To reinstate our reinsurance coverage for further 2011 property catastrophes, we will cede an estimated $26 million of premiums to our reinsurers, reducing second-quarter 2011 earned premiums by that amount.”
Source: Cincinnati Financial Corporation www.cinfin.com
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