Insurance group The Progressive Corporation has said that it currently expects to incur losses of approximately $120 million from Hurricane Michael, which hit Florida last week as a Category 4 hurricane.
This estimate consists of $60 million in losses for Progressive’s vehicle business and $60 million for its property business, which represents the retention level under its property catastrophe reinsurance coverage.
The company explained that, while it is too early to estimate the full impact of Hurricane Michael on its property business, it expects its reinsurance coverage to absorb any losses above this retention level.
Progressive stipulated that its estimates are currently based on very early claims reporting information and a number of assumptions, which may differ from its expectations.
J.P. Morgan recently said that it expects Progressive to be one of the primary insurers most exposed to losses from Hurricane Michael, although it believes that losses will be manageable for most companies.
Progressive also stated that it incurred $45 million of catastrophe losses in September, more than half of which were caused by Hurricane Florence. This compares with catastrophe losses of $155 million for the same period last year, which were primarily caused by Hurricane Irma.
Approximately $26 million of Progressive’s September 2018 catastrophe losses were from its vehicle business and $19 million were from its property business, while in September 2017 losses from Progressive’s vehicle business totalled $100 million and losses from its property business totalled $55 million.
The company’s total year-to-date catastrophe losses are approximately $383 million, compared to $778 million last year, it said.