P&C insurance company The Hanover has reported estimated catastrophe losses of $190 million for the fourth quarter of 2022, of which $165 million, or 87%, were driven by Winter Storm Elliott.
At this level, the pre-tax loss represented 13.9 points of net earned premiums, and was approximately $137 million above the company’s Q4 catastrophe assumption.
The loss also raises The Hanover’s combined ratio to 108.0%, up from 99.8% for the same period last year, when catastrophes accounted for only 7.7 points.
Excluding catastrophe losses, the combined ratio would be 94.1%, versus 92.1% last year.
Taking this and other currently available information into account, The Hanover expects to report an after-tax net loss per share of $0.33 and operating loss per share of $1.05 for Q4.
“Winter Storm Elliott battered the majority of the United States, bringing blizzard conditions with heavy snow, freezing rain, dangerous winds, and well below-freezing temperatures, resulting in significant damage to commercial and residential property during the December holiday season,” said John C. Roche, President and CEO at The Hanover.
“We believe the unfortunate timing of the storm, occurring when many were away from their homes and businesses, likely delayed the discovery and remediation of water damage, increasing losses in our core commercial lines,” he noted.
Roche continued: “We have a robust track record of successful catastrophe exposure management, risk modeling and portfolio diversification initiatives, as demonstrated by our relatively low catastrophe losses from hurricanes and other traditional perils in the recent years. And, we are confident in our ability to address winter weather and water-related events through pricing, risk management and other innovative tools effectively.”
“Looking beyond catastrophes, we successfully advanced our action plans towards recapturing target margins in property lines, achieving double digit renewal price increases in all three business segments in the fourth quarter.”