After taxes, the second-quarter catastrophe losses would come down to $117m, said Hanover Insurance
The Hanover Insurance Group revealed that it is expecting to record catastrophe losses of around $148m, before taxes, in the second quarter of this year (Q2 2020).
After taxes, the second-quarter catastrophe losses would come down to $117m, said the US insurance group. The company said that the estimated losses in the second quarter were driven mainly by hail and wind storms in the US Midwest in April, along with property losses arising from the recent civil unrest across the country.
Hanover Insurance said that the estimate also includes nearly $7m of favourable prior-year development on various events from recent accident years.
However, the second-quarter estimate does not cover the exposures or favourable overall loss frequency related to the Covid-19 pandemic. The insurer expects these to be continued to be recorded in the ex-cat current accident year loss and loss adjustment expense line.
According to Hanover Insurance, its updated view of the losses pertaining to the Covid-19 crisis has been expanded to cover workers’ compensation and is not anticipated to be material to its Q2 2020 results.
The insurance group, in a statement, said: “The company also expects to report lower than expected current accident year losses, excluding catastrophes, due to lower frequency, while still reflecting prudent reserves. This favorability will offset to a large degree the higher than expected catastrophe losses in the quarter.”
The company is slated to announce its Q2 2020 results during the month-end.
Hanover Insurance Q2 2019 and Q1 2020 net incomes
In the same quarter in 2019, Hanover Insurance reported a net income of $74m. The catastrophe losses during Q2 2019 amounted to $59.6m. The company’s operating income for the second quarter of 2019 was $77.7m.
In April 2020, Hanover Insurance reported a net loss of $40m for the first quarter of this year, compared to net income of $122.4m it made in Q1 2019. Its operating income for the first quarter was $86.8m.