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The Hanover braced for $148mn of Q2 cat losses

15th July 2020 - Author: Matt Sheehan

Massachusetts-based property and casualty insurer The Hanover Insurance Group has announced that it is expecting second quarter catastrophe losses of $148 million pre-tax ($117 million after tax).

the-hanover-insurance-group-logoLosses were driven mainly by hail and wind storms in the Midwest in April and, to a lesser extent, property losses from civil unrest across the US.

The estimate also includes approximately $7 million of favourable prior-year development on several events from recent accident years.

However, it is important to note that the estimate does not include COVID-19-related exposures or favourable overall loss frequency, which will continue to be reported in the ex-cat current accident year loss and loss adjustment expense line.

That said, The Hanover does not expect COVID-19 related losses to be material to its Q2 results, even after expanding its view to include workers’ compensation.

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The company also expects to report lower than expected current accident year losses, excluding catastrophes, due to lower frequency, while still reflecting prudent reserves.

This favourability will offset to a large degree the higher than expected catastrophe losses in the quarter.

The Hanover is due to issue its second quarter financial results after the market closes on Tuesday, July 28.

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