ELBA, Ala.–(BUSINESS WIRE)–The National Security Group, Inc. (NASDAQ:NSEC) released estimates of
reported catastrophe losses from Hurricane Michael incurred by property
and casualty subsidiary National Security Fire & Casualty Company.
On October 10, 2018, Hurricane Michael made landfall along Florida’s
Panhandle near Mexico Beach. At landfall, Michael was a Category 4
hurricane with winds of approximately 155 mph. Based on data collected
from the National Weather Service, Michael was the third most intense
hurricane to make landfall in the continental United States with minimum
pressure on the afternoon of landfall at 919 millibars. As Hurricane
Michael moved inland into southeast Alabama and southwest Georgia, it
remained a very strong Category 3 storm before finally weakening to a
tropical storm as it moved through central Georgia and South Carolina.
We had policyholders in Alabama, Georgia and South Carolina exposed to
hurricane or tropical storm force winds from October 10th through
Our pre-tax loss, net of reinsurance, due to Hurricane Michael is
expected to be $4,000,000. Net of tax, Hurricane Michael will reduce our
2018 earnings by $3,160,000 and will reduce earnings per share by $1.25.
The impact of Hurricane Michael will be reflected in our fourth quarter
results. To date, we have over 1,500 claims reported from this event
with approximately 85% located in Georgia.
Based on our analysis of historical reporting patterns, preliminary post
event model output and assessment of early reports of claims to date, we
estimate our ultimate gross losses from Hurricane Michael to be in the
range of $10,000,000 to $15,000,000. However, any losses above our
$4,000,000 retention are covered by catastrophe reinsurance to the
extent of the upper limit of our catastrophe coverage of $72,500,000.
Based on our estimate of gross losses, we expect losses from Hurricane
Michael to remain well below the upper limits of our catastrophe
reinsurance coverage. We also purchase reinstatement premium protection
which reinstates catastrophe coverage for a second event that exceeds
the $4,000,000 per event retention level. While net losses from
Hurricane Michael will have a material impact on our 2018 earnings, we
do not expect the storm to adversely impact our capital position.
The National Security Group, Inc. (NASDAQ Symbol: NSEC), through its
property & casualty (P&C) and life insurance subsidiaries, offers
property, casualty, life, accident and health insurance in ten states.
The Company writes primarily personal lines property coverage including
dwelling fire and windstorm, homeowners, and mobile homeowners lines of
insurance. The Company also offers life, accident and health,
supplemental hospital and cancer insurance products. The Company was
founded in 1947 and is based in Elba, Alabama. Additional information
about the Company, including additional details of recent financial
results, can be found on our website: www.nationalsecuritygroup.com.
Information about forward-looking statements
Any statement contained in this report which is not a historical fact,
or which might otherwise be considered an opinion or projection
concerning the Company or its business, whether expressed or implied, is
meant as and should be considered a forward-looking statement within the
meaning of the “safe harbor” provisions of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Forward-looking statements are based on assumptions
and opinions concerning a variety of known and unknown risks, including
but not limited to changes in market conditions, natural disasters and
other catastrophic events, increased competition, changes in
availability and cost of reinsurance, changes in governmental
regulations, technological changes, political and legal contingencies
and general economic conditions, as well as other risks and
uncertainties more completely described in the Company’s filings with
the Securities and Exchange Commission. If any of these assumptions or
opinions proves incorrect, any forward-looking statements made on the
basis of such assumptions or opinions may also prove materially
incorrect in one or more respects and could cause actual results to vary
materially from our expected results. Please refer to the Company’s
Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q filed
with the Securities and Exchange Commission for information concerning
the important factors that can cause results to differ materially from
these forward-looking statements.
The National Security Group, Inc.
Brian McLeod, 334-897-2273