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National Security Group Inc. Message Board

  • bbarberayr bbarberayr Apr 30, 2011 9:26 AM Flag

    Tornadoes

    Looks like people are selling in worry about the claims from the Alabama tornadoes.

    Could be a major claim situation, but remember than have reinsurance for events over $3 million, so that is the max hit.

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    • That's $3 million per individual claim not in the aggregate... call me crazy, but its surprising to see a P&C insurer with over a third of its business in the state of Alabama up over 10% over the past couple months (this stock was ~$12 not that long ago) when in the interim this has happened. I guess we will have to sit back and wait to see how the claims come out and the next few quarters earnings look.

      • 1 Reply to thatballclub
      • Not true,
        this is pulled from page 20 of the anual report.

        Under the property and casualty subsidiaries reinsurance
        arrangement in force during 2010, the Company retained the first $3.5 million of insured losses from any single
        catastrophic event. The next $17.5 million in insured losses from any single event was 95% reinsured with the
        Company’s net retention being 5%. The third layer of reinsurance protection provided coverage for 100% of
        insured losses exceeding $17.5 million and up to $42.5 million. The fourth layer of reinsurance protection
        provided coverage for 100% of insured losses in excess of $42.5 million up to $72.5 million. The amount of
        catastrophe reinsurance protection purchased by the Company was based on computer modeling of actual
        Company exposure. The Company generally seeks catastrophe protection for scenarios based on the computer
        modeling that mitigates losses up to a near term 1 in 100 year event, further described as an amount at which the
        probability of not exceeding is not less than 99%. NSFC and Omega had a provision for one reinstatement
        (coverage for two catastrophic events) during 2010

        The 3.5 million is for a single event, like the storms in Al.

        This should limit our losses.

 
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