United Fire Anticipates Up to $35M in Q2 Losses from Spring Storms

Cedar Rapids, Iowa-based United Fire & Casualty Co. announced that it expects its second quarter results through May to include pre-tax catastrophe losses, net of reinsurance, of approximately $30 million to 35 million.

These losses include $7 million to $9 million in storm losses previously reported in United Fire’s first quarter news release; $5 million to $6 million from storms that hit southern states in late April; and $15 million to $20 million from the devastating May 22 tornado in Joplin, Mo.

The estimated losses for these catastrophe events are expected to contribute between 21.9 and 25.5 percentage points to the second-quarter property casualty combined ratio. The impact on after-tax earnings is estimated to be between $0.75 and $0.87 cents per share.

Randy A. Ramlo, president and CEO, said: “Over the past 10 years, catastrophe losses for the second quarter have averaged $8 million, compared with a full-year expected average of $25 million.

“However, the outbreak of tornadoes in the southern states in late April and then in Joplin have had a far more disastrous impact. Hundreds of people have lost their lives, and the road to rebuilding the affected communities will be a long one. Our claims staff has been hard at work helping policyholders recover from the storms and demonstrating the value of having their independent agent place their coverage with United Fire.”

Ramlo noted that meeting the needs of the company’s “Joplin policyholders was a particular challenge for our teams, as only medical and rescue personnel were allowed to enter the affected areas prior to Wednesday, May 25.”

Source: United Fire & Casualty Co.