Tuesday, 17 May 2011 22:05

Northeast Insurers Say Winter Storms Hurt Q1 Profits

Heavy winter storm activity has taken its toll on motorists and homeowners in the northeastern United States. Pennsylvania-based insurer Harleysville said the effects of severe winter storms over the area in the last few months will hurt its fourth quarter profits.

“We experienced unusually severe winter weather throughout much of the Mid-Atlantic and Northeast, especially in New England and New York,” said CEO Michael Browne, according to Insurance Journal. “The number of events—coupled with their frequency and closeness to one another in time—combined to produce elevated catastrophe and non-catastrophe claims activity throughout commercial and personal lines. We saw an abnormal increase in water damage, ice dams, roof collapses and fire losses in property, automobile claims, and weather-related casualty losses.

“This extreme weather resulted in significant disruption and financial loss for a large number of our policyholders,” he added.

Catastrophe losses will reduce operating income by $0.21 per share. Harleysville said its combined ratio will reflect significant winter losses not meeting the catastrophe definition, as well as 4.5 points of catastrophe losses for the quarter. In the same quarter, one year-ago, Harleysville has statutory combined ratio of 107.8, which included 10 points of catastrophe losses. Both years’ catastrophe losses exceed the company’s long-term average.

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