The Hanover Insurance Group, Inc.’s geographic footprint was impacted by 18 industry catastrophe events in July and August, leading the property and casualty insurer to pre-announce third quarter catastrophe losses in the range of $150 million to $165 million, pre-tax ($119m-$130m after-tax).
Approximately $75 million of The Hanover’s preliminary estimated losses for the third quarter relate to the impacts of Hurricane Ida, primarily from losses in the Northeast, as well as lesser impacts in the Gulf and Mid-Atlantic states.
According to the insurer, the mid-point of its Q3 loss range for all catastrophe events, in what’s been an active catastrophe season, is approximately $97 million above its pre-tax third quarter catastrophe load, mostly as a result of Ida.
While Hurricane Ida is expected to be a more costly event for the more coastal focused carriers, The Hanover’s Q3 estimate shows that the flooding and damage caused by the storm as it tracked northeast was notable, and has the potential to lead to significant reinsurance recoveries for some.
“Hurricane Ida caused widespread damage and tragic loss of life from the Gulf Coast to the Northeast,” said John Roche, President and Chief Executive Officer (CEO) at The Hanover.
“Our thoughts are with all those who have been impacted. We are committed to helping our customers and their communities recover quickly. Our efforts to manage coastal exposure have been very successful in the past and will continue as we and the industry adjust to changing weather patterns.
“Catastrophes aside, we expect our third quarter results to reflect our strong underlying performance, highlighting our distinctive market position, as well as our proven underwriting, pricing and risk management expertise,” he continued.
Currently, the insurance and reinsurance market is expecting an industry loss of between $25 billion and $35 billion from Ida. Although, once you include the top-end estimates including the Ida remnant related flooding damage in the northeast, as well as the cost to the NFIP then the industry exposure may be over the $35 billion mark.