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Safety Insurance Group Inc. Message Board

  • nhoutsideobserver nhoutsideobserver Nov 1, 2012 7:57 PM Flag

    Impact of Hurricane Sandy/ Forrest Gump Situation

    Hurricane Sandy had relatively little impact in Massachusetts. My guess for Safety would be $3 to $4 million, tops. That estimate is based on the $12 million they reported in Cat losses in the 3rd quarter last year for the hail storms, tornado and Hurricane Irene. For Mass, Sandy caused about 50% of the claims as Irene and their Irene losses were probably around $6 mllion. In addition, SAFT is probably looking at somewhat higher reinsurance costs as a result of Sandy.

    The real impact is going to be the Forrest Gump deal where Forrest Gump was left with the only shrimp boat after a bad hurricane. Most of Safety's competitors write a moderate amount of business in NJ and NY and are going to be significantly impacted by the storm. Chubb and Travelers will take a big hit. The direct writers like State Farm, Allstate and Liberty are major players in NJ and this will forstall any further moves in Massachusetts. I don't believe Safety has any direct business in NJ or NY.

    Safety stock, however, could slide down further in the short term for two reasons, 1. A knee jerk reaction to property insurance stock. 2. Plymouth Rock who owns 8% of Safety has a significant market share in NJ and probably will be forced to sell their Safety stock.
    Of course, right now, the main issue is that NJ and NY can start the rebuilding process.

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