American Financial Group’s (AFG) initial third quarter losses for catastrophe events including Hurricanes Harvey, Irma and Maria and the Mexico earthquakes are estimated at $105 million net of reinsurance coverage, pretax, and inclusive of reinstatement premiums and other associated offsets.
On an after-tax basis, this amount represents $0.95 per share.
AFG is backed up by extensive reinsurance programmes, with comprehensive catastrophe reinsurance coverage including a $15 million per occurrence net retention for its U.S.- based P&C operations and a separate $15 million per occurrence retention for Neon.
The insurer’s P&C segment has additional fully collateralized reinsurance coverage up to 95% of $200 million for catastrophe losses in excess of $100 million of traditional catastrophe reinsurance through a catastrophe bond.
Before Hurricane Irma struck, AFG purchased replacement reinsurance coverage for its catastrophe reinsurance programme layers expected to be hit by Hurricanes Harvey and Irma.
AFG said it will provide updated earnings guidance later this month together with the release of its third quarter results.
Carl Lindner III and Craig Lindner, AFG Co-Chief Executive Officers, commented in a statement; “our thoughts are with those who have been affected by the devastation caused by these catastrophic events, including our policyholders, our employees and their respective families.
“Our P&C Group claims teams are working with our agents and policyholders to identify and process covered claims quickly and efficiently to help our customers recover and restore their businesses and rebuild their communities.”
The insurer said the catastrophe losses will not preclude consideration of the payment of a special dividend in the fourth quarter of 2017.
