Allmerica Financial Corporation Announces Estimated Losses from Hurricane Katrina
18 Outubro 2005 - 7:11PM
PR Newswire (US)
WORCESTER, Mass., Oct. 18 /PRNewswire-FirstCall/ -- Allmerica
Financial Corporation (NYSE:AFC) announced today that its estimated
after-tax loss from Hurricane Katrina will be approximately $140
million, or $2.62 per share. The after-tax loss of $140 million is
net of reinsurance and includes the cost of reinsurance
reinstatement premiums, loss adjustment expense, as well as an
estimate for the Louisiana Citizens Fair Plan assessment. Allmerica
estimates its gross direct loss and loss adjustment expense from
Hurricane Katrina to be $485 million, with approximately two-thirds
of the losses sustained in its commercial lines business and
one-third attributed to its personal lines business. Allmerica's
loss estimate for Hurricane Katrina was developed using an analysis
of the claims reported to date and estimated values of properties
in the affected areas. Wind-speed data, flood maps and information
provided by on-the-ground staff and independent adjusters were used
to project anticipated claims and damage projections. Anticipated
costs for demand surge were also included in the estimate. However,
estimating losses following a major catastrophe is an inherently
uncertain process, which is made more difficult by the
unprecedented nature of this event. Factors that add to the
complexity in this event include the legal and regulatory
uncertainty, difficulty in accessing portions of the affected
areas, the complexity of factors contributing to the losses, delays
in claim reporting, the exacerbating circumstances of Hurricane
Rita and a slower pace of recovery resulting from the extent of
damage sustained in the affected areas. As a result, there can be
no assurance that the company's ultimate costs associated with this
event will not be substantially different from these estimates.
"The damage and devastation caused by Hurricane Katrina has placed
unprecedented demands on our industry and our company," said Fred
Eppinger, President and Chief Executive Officer of Allmerica
Financial Corporation. "At Hanover, our people have worked
tirelessly in response, taking reports, assessing and settling
claims, and at times, just listening and providing comfort. They
are committed to do what it takes to serve our agents and their
customers." Allmerica's third quarter results also will be impacted
by Hurricane Rita. The company estimates its losses from Hurricane
Rita to be approximately $30 million on a pre-tax basis and $19.5
million after taxes, or $0.37 per share. Eligible losses resulting
from Hurricanes Katrina and Rita, together with other catastrophe
losses incurred to date, puts the company's eligible catastrophe
losses at the maximum retention level such that losses from other
catastrophic events occurring in 2005 will be subject to its
aggregate reinsurance program. Under this program, the company is
protected against multiple catastrophes within a calendar year. The
treaty provides $50 million of reinsurance coverage in excess of
cumulative losses in the year of approximately $80 million. For
purposes of the $80 million retention, individual events are capped
at $30 million. The company retains 10% of the risk on the $50
million coverage. With the payment of the reinstatement premium,
the company will also continue to maintain a property catastrophe
occurrence treaty which serves to protect the company from other
significant aggregate losses arising in 2005 from a single event,
as in Hurricane Katrina. The catastrophe occurrence treaty provides
$365 million of reinsurance coverage in excess of $45 million of
losses. The company retains approximately 15% of the risk on the
$365 million coverage. Allmerica Financial Corporation expects to
announce its third quarter financial results on Tuesday, October
25, 2005 with a conference call to follow on Wednesday, October 26,
2005. The company's estimate of gross and net losses from
Hurricanes Katrina and Rita are forward-looking statements as
defined in the Private Securities Litigation Reform Act of 1995.
The company cautions investors that any such forward-looking
statements are estimates which involve significant judgment and
actual results could differ materially. Investors should consider
the risks and uncertainties in our business that may affect such
estimates and future performance, including the difficulties in
arriving at such estimates noted above and that are otherwise
discussed in readily available documents, including the Company's
annual report and other documents filed by Allmerica with the
Securities and Exchange Commission and which are also available at
http://www.allmerica.com/ under "Investor Relations." Allmerica
Financial Corporation is the holding company for a group of
insurance companies headquartered in Worcester, Massachusetts.
CONTACTS: Investors: Media: Sujata Mutalik Michael F. Buckley (508)
855-3457 (508) 855-3099 Website: http://www.allmerica.com
DATASOURCE: Allmerica Financial Corporation CONTACT: Sujata
Mutalik, +1-508-855-3457, , or Michael F. Buckley, +1-508-855-3099,
, both of Allmerica
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