CNA Financial Corporation announced that its preliminary estimate of losses relating to Hurricane Katrina is approximately $280 million, after-tax. This estimate includes pretax gross commercial losses and loss expenses of $750 million, anticipated reinsurance recoveries and reinsurance reinstatement premiums.
The reinsurance recoveries anticipate significant utilization of the Company’s property and marine reinsurance treaties. CNA’s corporate property catastrophe treaty provides 90 percent coverage for the accumulation of losses between $200 million and $500 million arising out of a single catastrophe occurrence. After payment of a reinstatement premium, CNA has coverage for one additional occurrence under the corporate property catastrophe treaty.
CNA’s third-quarter earnings were also adversely impacted by losses from Hurricanes Dennis, Ophelia and Rita. These losses, net of reinsurance, are estimated at $20 million after-tax.
The company’s exposure to Hurricane Rita is further mitigated by a supplemental Aggregate Property Catastrophe treaty. This treaty was purchased to obtain reinsurance protection against losses from a second or subsequent catastrophic event. CNA has approximately $45 million of available recoveries from this treaty in the event its estimate of gross losses from Hurricane Rita increases in the future.
Chicago-based CNA is the country’s seventh largest commercial insurance writer and the 14th largest property and casualty company.
Topics Catastrophe Natural Disasters Property Reinsurance Hurricane
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