The National Security Group, Inc. Releases Estimates of Catastrophe Losses from Hurricane Laura
15 Setembro 2020 - 5:00PM
Business Wire
The National Security Group, Inc. (NASDAQ:NSEC) releases
preliminary estimates of insured catastrophe losses from Hurricane
Laura incurred by property and casualty subsidiary National
Security Fire & Casualty (NSFC).
On August 27, 2020, Hurricane Laura made landfall along the
western Louisiana coast near Cameron. At landfall, Laura was a
Category 4 hurricane with winds of approximately 150 mph with
minimum pressure on the morning of landfall at 937 millibars. Based
on data collected from the National Weather Service, Hurricane
Laura was the strongest land-falling hurricane to hit Louisiana
since the 1856 Last Island Hurricane and was the fifth strongest
hurricane on record to make landfall in the continental United
States. In a very active 2020 storm season, Hurricane Laura was the
seventh named storm to make landfall in the U.S. setting a record
as the earliest seventh named storm to make a U.S. landfall.
Our pre-tax loss, net of reinsurance, due to Hurricane Laura is
expected to be $2,250,000. Net of tax, Hurricane Laura will reduce
our 2020 earnings by $1,778,000 and will reduce earnings per share
by $0.70. The impact of Hurricane Laura will be reflected in our
third quarter results. To date, we have over 700 claims reported
from this event with approximately 90% of these claims reported by
our Louisiana policyholders.
Based on our 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 Laura to be in the range of $5,500,000 to $6,500,000.
Based on our estimate of gross losses, we expect losses from
Hurricane Laura to remain well below the upper limits of our
catastrophe reinsurance coverage.
The Company maintains catastrophe reinsurance coverage to
mitigate loss exposure from catastrophic events. With our 2020
catastrophe contract placement, our single event catastrophe
retention remained unchanged from the prior year at $4,000,000. In
our 2020 contract, we placed an underlying second event layer of
$2,000,000 in excess of $2,000,000. This additional coverage
effectively lowers our second event retention to $2,000,000. Also
unchanged from last year, we maintain catastrophe reinsurance
covering incurred claims of a single catastrophe event up to
$72,500,000. Our catastrophe reinsurance has a reinstatement
provision for one event and covers the cost of a second event up to
the same $72,500,000 upper limit. Because we were impacted by one
catastrophe event, in the second quarter of 2020, that exceeded
$2,000,000, Hurricane Laura losses fall within the underlying layer
second event coverage and our retention will be $2,000,000. We will
also pay a $250,000 reinstatement on this underlying layer.
About The National Security Group, Inc.
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 primarily writes personal lines property
coverage including specialty market 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.
Significant uncertainties still remain regarding the ultimate
impacts of the COVID-19 pandemic on future premium revenue, losses,
claims settlement costs and investment results. These uncertainties
could have a material adverse impact on our net income and results
of operations. Additional information and disclosures related to
risk factors are discussed in our 2019 Annual Report on Form 10-K
as well as our latest Form 10-Q and should be read in conjunction
with this Form 8-K.
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version on businesswire.com: https://www.businesswire.com/news/home/20200915006134/en/
Brian McLeod - Chief Financial Officer @ (334) 897-2273.
National Security (NASDAQ:NSEC)
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