Further evidence of the elevated impacts of severe and convective weather in the second-quarter of 2020 are apparent in a pre-announcement from property and casualty insurer The Hanover Insurance Group, Inc., which expects around $148 million of catastrophe losses for the quarter.
The Hanover said last night that it is expecting around $148 million of pre-tax catastrophe losses for Q2 of this year, largely driven by severe weather and hail events.
It was April’s severe weather and hail outbreaks that are expected to have driven the majority of the loss for The Hanover, as it seems the company was less exposed to regions impacted by further convective weather outbreaks through the rest of the quarter.
The estimate also includes some impact to a lesser extent from property losses caused by the rioting and civil unrest across the United States in the quarter.
The estimate, which comes out at $117 million after tax, also includes around $7 million of favorable prior-year development on several events from previous years.
The Hanover has not provided an estimate of losses due to Covid-19, although the insurer says it does not expect this to be “material” to its second-quarter results.
Overall, The Hanover said it expects to report “lower than expected current accident year losses, excluding catastrophes, due to lower frequency,” which it says will “offset to a large degree the higher than expected catastrophe losses in the quarter.”
Analysts warned previously that severe weather losses may have run above plan for many U.S. carriers in Q2 2020 and this appears to be evident in pre-announcements from some.
On The Hanover, this estimate is above analysts previous expectations, but the expectation of a lower claims frequency across much of its book, partly due to Covid-19, is expected to be in the firms favour once results are reported.