Meadowbrook Insurance Group Estimates $12.5M in Pre-Tax Losses From Unusual Frequency of Severe Weather

Meadowbrook Insurance Group, Inc. MIG today announced that it estimates its second quarter results will include higher than average storm related losses, net of reinsurance, of approximately $12.5 million pre-tax. This estimated amount is approximately $6.3 million pre-tax higher than normal, which will add 3.5 percentage points to the combined ratio and reduce earnings per share by approximately $0.08 per share in the quarter. Commenting on the unusual frequency of storm activity, Meadowbrook President and Chief Executive Officer Robert S. Cubbin stated: "Our underwriting approach to property exposures focuses on spread of risks, avoiding those areas most frequently exposed to severe weather and maintaining a low catastrophe reinsurance retention level. None of the storms this quarter were severe enough to trigger our catastrophe reinsurance program as no single event resulted in losses greater than $2.4 million. That said, the frequency of storm losses was very high, with 12 ISO designated storms occurring during the quarter. The cumulative effect of the storms led to this greater than usual loss for us in the quarter. Our relatively lower than industry exposure to property catastrophes reduced our potential for even greater losses despite the significant number of severe storms that devastated many parts of the country."