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Horace Mann anticipating $39mn hit from Camp Wildfire

7th December 2018 - Author: Matt Sheehan

Horace Mann Educators Corporation, an insurance and retirement solutions company for U.S educators and school employees, has estimated that it will incur losses of between $38 million and $39 million (pre-tax) from the recent Camp Wildfire in California.

horace-mann-logoThe company said its estimate was net of anticipated reinsurance recoverables offset by reinsurance reinstatement premiums.

Under its catastrophe reinsurance agreements, Horace Mann retains the first $25 million of covered losses and 5% of losses from $25 million to $175 million.

The Camp Wildfire became the deadliest and most destructive wildfire in California’s history after devastating the town of Paradise on November 8, destroying a total of 18,793 structures, killing 85 people, and burning through 153,336 acres.

Recent estimates by catastrophe modellers AIR Worldwide and RMS put total insured losses for the Camp and Woolsey Fires at between $9 billion and $13 billion.

Horace Mann noted that its estimate represents approximately 25 percentage points on its fourth quarter 2018 combined ratio, or approximately $0.70 to $0.74 per diluted share after tax.

“The Camp Fire was a devastating event, causing unprecedented damage,” said Marita Zuraitis, President and Chief Executive Officer (CEO) of Horace Mann.

“Our focus has been on making certain our agents and claims professionals are available to our policyholders,” she continued. “They have been doing a stellar job processing claims under difficult circumstances.”

The company said that the estimated financial impact of the Camp Fire includes preliminary gross losses of approximately $150 million from claims reported to the company through December 5 and from future expected claims.

It added that it expects losses from the Woolsey Fire to be immaterial.

Horace Mann’s loss estimates compare with other recent figures from Chubb, who is expecting wildfire losses of $225 million, Beazley at $40 million, and the Hartford at $365 million.

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