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).
Losses 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.
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.