Editor's Note: This article originally appeared in National Underwriter, P&C.
High U.S. storm losses affected a number of earnings announcements late this week, eclipsing normal weather-related losses for this time of year and impacting profitability.
State Auto Financial Corp., which earlier this month warned of significant losses, reported a 2010 second-quarter net loss of $26.2 million compared with a net loss of $3.2 million last year at this time. Catastrophe losses due to wind and hail for the Columbus, Ohio-based insurer caused $57.5 million in losses, adding, 18.6 points to its loss ratio. The combined ratio for the second quarter was 115.2.
About 60 percent of losses were from Indiana, Minnesota, Ohio, and Tennessee -- four of State Auto's largest property states, the company said. In addition, flooding in the Nashville area caused commercial and automobile claims.
"It was a difficult quarter weather-wise for State Auto, our policyholders and for the industry," said Bob Restrepo, State Auto's chief executive, in a statement.
EMC Insurance Group Inc. said second quarter storm losses added 17.2 points to its combined ratio of 108.3. None of the Midwest storms triggered reinsurance coverage so the company retained all losses, driving a decline in second-quarter net income to about $3.3 million from nearly $7 million the prior year at the same time.
What about Selective Insurance and Cincinnati Financial?
New Jersey-based commercial and personal insurer Selective Insurance Group Inc. reported a combined ratio of 100.9, with 4.5 points added by $16 million in storm losses.
But Selective reported a 29 percent increase in net investment income, resulting in 2010 second quarter net income of $24.6 million compared to $2.8 million for the 2009 second quarter.
American Safety Insurance Holdings Inc., a Bermuda-based alternative risk insurer and reinsurer, reported a combined ratio of 99.4, including nearly a 62 loss ratio from storm-related property losses. However an increase in written premium kept second-quarter net income steady at $6.2 million compared to $6.9 million last year.
Nearly $100 million in storm losses during the second quarter was actually somewhat positive news for Cincinnati Financial Corp., which recorded 2010 second-quarter net income of $27 million compared with a net loss of $19 million a year ago. The business, home and auto insurer took on $118 million in storm losses in 2009 at this time.
Again, a rise in investment income -- in this case eight percent -- drove second-quarter improvements for Cincinnati Financial. The combined ratio was 101.7, down from 110.9 last year at the second quarter.
National Underwriter, part of Summit Business Media's P&C Magazine Group, which includes Claims.
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