Massachusetts-based property and casualty insurer The Hanover Insurance Group (THG) is expecting a $50 million pre-tax hit to its fourth quarter operating results due to catastrophe activity.
This figure represents 4.6% of net premiums earned, an increase from THG’s Q418 assumption of 3.6%.
Cat losses in the final quarter of 2018 are largely a result of the Camp and Woolsey wildfires in California, as well as hurricane Michael.
THG’s Q4 results have also been impacted by higher-than-expected current accident year losses due to high property activity stemming from large losses and non-cat weather, as well as increases in auto bodily injury loss severity.
Consequently, THG is anticipating a Q4 combined ratio in the range of 97.4% and 97.8%. This would bring its full year CR to approximately 96.2% (91% excluding catastrophes).