Cincinnati Financial sees Q3 pretax catastrophe losses about $120M from storms
Cincinnati Financial announced that The Cincinnati Insurance Companies' property casualty group expects its third-quarter results to include pretax catastrophe losses of approximately $120M, representing an impact on the Q3 combined ratio of approximately 9.5 to 10.0 percentage points, based on estimated property casualty earned premiums. The company's 10-year historical average contribution of catastrophe losses to the combined ratio is 5.6 percentage points for the third quarter. "Losses from natural catastrophe events affect property casualty insurance underwriting income, one of the sources of consolidated net income along with profits from investment operations and life insurance operations," the company said. The company estimates its Q3 property casualty combined ratio will be in the range of 96%-98%, including the effect of catastrophe losses. The ratio also reflects net favorable reserve development on prior accident years for the company's commercial casualty line of business. The company also announced that Hurricane Michael is expected to impact fourth-quarter 2018 results, but that it currently cannot predict the magnitude, as many damaged areas are not yet accessible. Based on initial claims reports received, most of the claims covered by the company's standard market lines business are for personal lines accounts with nearly half located in Georgia and approximately one-quarter in Alabama.