- The Progressive, a property and casualty insurer, reduced its loss estimates from Hurricane Ian
- The company now estimates losses and allocated loss adjustment expenses for its property business as of December-end to be $1B, prior to giving effect to reinsurance
- The $1B amount reflects favorable development of $400M from its previously estimated loss and allocated loss adjustment expenses of $1.4B, reported as of Sep. 30
- Progressive also said that vehicle losses remained unchanged from November
Three months after Hurricane Ian slammed into Florida,
Progressive Corporation lowered its loss and allocated loss adjustment expenses (ALAE) to $1 billion.
The insurer said in a Wednesday press release that the new estimate reflects a favorable development of $400 million from its estimated loss and ALAE of $1.4B released at the end of September.
Additionally, today’s report noted that the company incurred $615 million in vehicle losses, including boats and recreational vehicles, as a result of the Category 4 storm.
Progressive also said that losses from vehicle damage remained “essentially unchanged” from November when it said the total estimate of losses was $585 million.
Progressive went on to say that given that it exceeded its $200 million retention threshold under its reinsurance contracts in September, the change in estimate for the firm’s Property losses and ALAE will not impact its results of operations for December.
This suggests that the firm’s reinsurance recovery will now be $800 million, compared to the previous $1.2 billion that it had been anticipating previously.
Progressive added that these estimates could continue to change moving forward.
“We continue to evaluate and reserve for this catastrophe using our knowledge and experience of reporting patterns from many past storms, in addition to actual claims reported and assumptions specific to this hurricane.
“As further described in our periodic reports filed with the SEC, these estimates will continue to change, favourably or unfavourably, as additional information develops, and additional claims are reported,” the company said.
Hurricane Ian made landfall on Sept. 28, pummeling Florida’s Gulf Coast as a Category 4 storm with sustained winds of 155 mph before cutting across toward the east coast. The storm left a path of destruction across the Sunshine State, producing catastrophic flooding and deadly storm surge.