The National Security Group, Inc. Releases Estimates of Catastrophe Losses from Hurricane Irma & Update on Cumulative 2017 Ca...
September 18 2017 - 6:15PM
Business Wire
The National Security Group, Inc. (NASDAQ:NSEC) released
estimates of reported catastrophe losses from Hurricane Irma and
cumulative year-to-date catastrophe losses through September 18,
2017 incurred by property and casualty subsidiary National Security
Fire & Casualty.
According to the National Hurricane Center, Hurricane Irma was
one of the strongest Atlantic basin hurricanes ever recorded. At
its peak, Hurricane Irma registered wind speeds of 185 miles per
hour, making it an intense Category 5 storm. On September 10, 2017,
Hurricane Irma made landfall in the Florida Keys as a Category 4
storm. After moving north through the Florida peninsula, Hurricane
Irma impacted our policyholders in Alabama, Georgia, South Carolina
and Tennessee. Georgia was the primary state in our coverage area
impacted by Hurricane Irma comprising over 85% of reported claims
to date.
Based on managements' analysis of historical reporting patterns,
preliminary post event model output and assessment of early reports
of claims to date, we estimate our ultimate gross losses from
Hurricane Irma to be in the range of $2,500,000 to $3,000,000. Net
of tax, we expect losses from Hurricane Irma to reduce our quarter
and year-to-date earnings in the range of $1,650,000 ($0.66 per
share) to $1,980,000 ($0.79 per share).
We maintain catastrophe reinsurance that provides coverage from
a catastrophe event up to $72.5 million subject to a $4 million per
event retention. We also prepay reinstatement premium protection
which provides additional coverage for subsequent events that
exceed the $4 million per event retention level. Based on our
estimates outlined above, we do not expect our losses from
Hurricane Irma to exceed our level of retention under our
catastrophe reinsurance program.
Unfortunately, Hurricane Irma has served to add to a persistent
pattern of severe weather in 2017, which commenced in early January
and continued into September. The combination of increased
frequency of severe thunderstorm activity, coupled with hurricane
losses, will make 2017 one of the costliest years in Company
history for non-reinsured catastrophe losses. For the year to date,
National Security Fire & Casualty Company was impacted by 24
catastrophe events, including Hurricane Irma. Each of these events
have been below our catastrophe reinsurance retention of
$4,000,000. To date, these catastrophe events have produced over
2,700 policyholder claims totaling nearly $12,000,000. While these
events will have a material impact on our 2017 earnings, we remain
in a strong capital position and expect no adverse impact on our
insurance operations.
The National Security Group, Inc. (NASDAQ Symbol: NSEC), through
its property and casualty and life insurance subsidiaries, offers
property, casualty, life, accident and health insurance in ten
states. The Company writes primarily personal lines property
coverage including dwelling fire and windstorm, homeowners and
mobile homeowners lines of insurance. The Company also offers life,
accident and health, supplemental hospital and cancer insurance
products. The Company was founded in 1947 and is based in Elba,
Alabama. Additional information about the Company, including
additional details of recent financial results, can be found on our
website: www.nationalsecuritygroup.com.
Information about forward-looking statements
Any statement contained in this report which is not a historical
fact, or which might otherwise be considered an opinion or
projection concerning the Company or its business, whether
expressed or implied, is meant as and should be considered a
forward-looking statement as that term is defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are based on assumptions and opinions concerning a
variety of known and unknown risks, including but not limited to
changes in market conditions, natural disasters and other
catastrophic events, increased competition, changes in availability
and cost of reinsurance, changes in governmental regulations,
technological changes, political and legal contingencies and
general economic conditions, as well as other risks and
uncertainties more completely described in the Company’s filings
with the Securities and Exchange Commission. If any of these
assumptions or opinions proves incorrect, any forward-looking
statements made on the basis of such assumptions or opinions may
also prove materially incorrect in one or more respects and may
cause future results to differ materially from those contemplated,
projected, estimated or budgeted in such forward-looking
statements. Please refer to the Company's Annual Reports on Form
10-K and Quarterly Reports on Form 10-Q filed with the Securities
and Exchange Commission for information concerning the important
factors that can cause results to differ materially from these
forward-looking statements.
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version on businesswire.com: http://www.businesswire.com/news/home/20170918006486/en/
The National Security Group, Inc.Brian McLeod, 334-897-2273Chief
Financial Officer
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