Massachusetts-based Allmerica Financial Corp. announced estimated pre-tax catastrophe losses of approximately $30 million related to Hurricane Jeanne.
The company expects to cede all Hurricane Jeanne losses to reinsurers, subject to a 10 percent retention, since year-to-date catastrophe losses eligible for reinsurance have exceeded the retention limit in the company’s property catastrophe aggregate reinsurance treaty. This reduces the company’s pre-tax estimated loss impact from Hurricane Jeanne to about $3 million, net of reinsurance.
The company’s property catastrophe aggregate reinsurance treaty protects against multiple catastrophes within a single 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. In addition, the company retains 10% of the risk on the $50 million coverage.
Estimated year-to-date catastrophe losses eligible for reinsurance total $122 million. Under the terms of the reinsurance agreement the company has $8 million in reinsurance coverage available for eligible catastrophe losses incurred through the end of 2004, subject to a 10 percent retention.
Estimated pre-tax catastrophe losses net of reinsurance for the quarter to date are approximately $62 million, or $1.06 per share after taxes. The anticipated charges will be reflected in the company’s third quarter results. Total estimated pre-tax catastrophe losses for the year to date are at $98 million, net of reinsurance.
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