Cincinnati Financial said that its property casualty group expects a pre-tax catastrophe losses of $150m to $200m, due to severe weather during the entire month of April.
Cincinnati Financial president and CEO Steven Johnston said that while spring storms typically raise second-quarter catastrophe losses above the quarterly average, the devastation caused by the late April tornado outbreak in southern states had a more dramatic impact.
"The cost of this event goes well beyond industry estimates of multi-state property damage ranging from $4b to $6bn," Johnston said.
"The impact of April 2011 catastrophe losses on our second-quarter loss ratio would be approximately 21 to 28% points, net of reinsurance and based on estimated earned premiums for the full second-quarter.
"The tornado outbreak in late April caused losses exceeding $45m, which is the amount of loss we retain for a single catastrophic event before our reinsurers cover further losses.
We expect recovery from our reinsurers of significant losses incurred above our retention level. To reinstate our reinsurance coverage for further 2011 property catastrophes, we will cede an estimated $26m of premiums to our reinsurers, reducing second-quarter 2011 earned premiums by that amount.