The National Security Group, Inc. Releases Estimates of Catastrophe Losses from Hurricane Michael
October 18 2018 - 5:15PM
Business Wire
The National Security Group, Inc. (NASDAQ:NSEC) released
estimates of reported catastrophe losses from Hurricane Michael
incurred by property and casualty subsidiary National Security Fire
& Casualty Company.
On October 10, 2018, Hurricane Michael made landfall along
Florida's Panhandle near Mexico Beach. At landfall, Michael was a
Category 4 hurricane with winds of approximately 155 mph. Based on
data collected from the National Weather Service, Michael was the
third most intense hurricane to make landfall in the continental
United States with minimum pressure on the afternoon of landfall at
919 millibars. As Hurricane Michael moved inland into southeast
Alabama and southwest Georgia, it remained a very strong Category 3
storm before finally weakening to a tropical storm as it moved
through central Georgia and South Carolina. We had policyholders in
Alabama, Georgia and South Carolina exposed to hurricane or
tropical storm force winds from October 10th through October
11th.
Our pre-tax loss, net of reinsurance, due to Hurricane Michael
is expected to be $4,000,000. Net of tax, Hurricane Michael will
reduce our 2018 earnings by $3,160,000 and will reduce earnings per
share by $1.25. The impact of Hurricane Michael will be reflected
in our fourth quarter results. To date, we have over 1,500 claims
reported from this event with approximately 85% located in
Georgia.
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 Michael to be in the range of $10,000,000 to $15,000,000.
However, any losses above our $4,000,000 retention are covered by
catastrophe reinsurance to the extent of the upper limit of our
catastrophe coverage of $72,500,000. Based on our estimate of gross
losses, we expect losses from Hurricane Michael to remain well
below the upper limits of our catastrophe reinsurance coverage. We
also purchase reinstatement premium protection which reinstates
catastrophe coverage for a second event that exceeds the $4,000,000
per event retention level. While net losses from Hurricane Michael
will have a material impact on our 2018 earnings, we do not expect
the storm to adversely impact our capital position.
The National Security Group, Inc. (NASDAQ Symbol: NSEC), through
its property & casualty (P&C) and life insurance
subsidiaries, offers property, casualty, life, accident and health
insurance in ten states. The Company writes primarily personal
lines property coverage including 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 within the meaning of the "safe harbor"
provisions of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. 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 could
cause actual results to vary materially from our expected results.
Please refer to the Company's Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q filed with the Securities and
Exchange Commission for information concerning the important
factors that can cause results to differ materially from these
forward-looking statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20181018005956/en/
The National Security Group, Inc.Brian McLeod, 334-897-2273Chief
Financial Officer
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