EMC Insurance Group’s reinsurance segment suffered a record $18.5 million of catastrophe and storm losses in the fourth-quarter of 2018, causing the firm to announce an expected net loss for the year ending December 31st, 2018.
The total catastrophe loss figure is comprised of roughly $6.5 million from the Camp wildfires, $2.5 million from the Woolsey wildfires, $3 million from hurricane Michael, and $2.1 million as a result of typhoon Jebi.
EMC’s property and casualty insurance segment also incurred catastrophe and storm losses of roughly $2.1 million in the fourth-quarter. However, after filling the retentions under both its semi-annual aggregate excess of loss treaties in Q4, all the losses from the segment were transferred to Employers Mutual, explains EMC.
The record level of Q4 catastrophe and storm losses has led the firm to revise its non-GAAP operating income guidance from a range of $1.30 to $1.50 per share, to a net loss in the range of $0.33 to $0.37 per share, for the year end December 31, 2018.
Previously, the company had anticipated a GAAP combined ratio of 102.6%, which was based on a 7.7% impact from catastrophe and storm losses. However, the higher level of losses is now expected to account for 9.4% of the firm’s 2018 GAAP combined ratio.
For Q4, EMC expects its property and casualty segment to report a GAAP combined ratio of around 92.3%, increasing to 103.3% for the full-year 2018. For the reinsurance segment in Q4, EMC expects to report a GAAP combined ratio of roughly 134.6%, which declines to 106.2% for the full-year 2018.
