May 11, 2016 by Canadian Underwriter
Economical Insurance estimates its pre-tax losses related to the Fort McMurray wildfire will be $35 million to $45 million, net of reinsurance recoveries and reinstatement premiums.
Economical Insurance said in a statement on Wednesday that its catastrophe reinsurance coverage commences once losses reach $30 million on an individual loss event. The insurer will record the loss related to this catastrophe in its second quarter results.
The initial loss estimate is based primarily on claims reported to date, known exposures in the area, and reported percentage losses in various parts of the community, Economical said in the statement. In addition, there is currently no direct access to the area, losses within an area can vary from one street to the next and the fire is still ongoing. The estimate also assumes that this wildfire does not return to Fort McMurray. As a result, the ultimate losses incurred may differ from the initial estimate, Economical added.
“The damage resulting from this catastrophic fire underscores the importance of our promise to our customers to be there when they need us most,” said Karen Gavan, Economical president and CEO, in the statement. “Our first priority is to our policyholders. We quickly mobilized our catastrophe response team and are providing emergency funding to our policyholders to help them with their immediate needs. We will continue to take care of our policyholders as they deal with the significant suffering this catastrophe has caused and move forward with rebuilding their lives.”
On Tuesday, Economical released its financial results, reporting a combined ratio of 101.1% in the first quarter of 2016 ending March 31, down 4.6 percentage points from the Q1 2015 combined ratio of 105.7%. Its gross written premiums were up by 1.1% over the first quarter of 2015, from $422.1 million to $426.7 million in the most recent quarter. Net earned premiums were up from $469.4 million in Q1 2015 to $481.4 million in Q1 2016. The company also generated a net income of $28.5 million for the quarter, down from $34.2 million in the same quarter a year ago.
And on Monday, Economical launched its direct business, Sonnet Insurance Group. The new digital platform will initially offer personal home insurance policies, including homeowner tenant, condo and landlord insurance, while personal auto is scheduled to follow in the second half of 2016, Economical reported at the time.
Founded in 1871, property and casualty insurer Economical Insurance has more than $2 billion in annualized premium volume and $5.3 billion in assets as of March 31. The Waterloo, Ont-based Canadian-owned and operated company covers more than one million customers across the country.
WATCH: Still no clear timetable for when Fort McMurray residents can go home @ShayeGanam has the latest #ymmfire https://t.co/diTCXlmZ7j
— Global Edmonton (@GlobalEdmonton) May 12, 2016
May 11, 9:30 p.m. – A message from Darby Allen #ymmfire #fortmacfire pic.twitter.com/EgAWpWctKB
— rmwoodbuffalo (@RMWoodBuffalo) May 12, 2016
RCMP officers from across Canada arrived yesterday to relieve members in Fort McMurray. #ymmfire pic.twitter.com/nbJmd63dw7
— RCMP Alberta (@RCMPAlberta) May 12, 2016
WATCH: Firefighters reunited with family after battling Fort McMurray wildfire @Quinnohler reports #ymmfire #abfire https://t.co/ERt8g2O8Wl
— Global Edmonton (@GlobalEdmonton) May 12, 2016
1/2 RCMP & @ABSheriffs are assisting in towing operations. Owners will be contacted & told how to recover vehicles. pic.twitter.com/figKtkVO4h
— RCMP Alberta (@RCMPAlberta) May 11, 2016
2/2 Owners of towed vehicles can phone 310-4455 for information. #YMMfire pic.twitter.com/Qh1EPgcm8j
— RCMP Alberta (@RCMPAlberta) May 11, 2016
Update Ref: Abandoned Vehicles from Fort McMurray evacuation (1:15pm, May 11) #ymmfire #Hwy63 pic.twitter.com/3XeqZ1K90p
— 511 Alberta (@511Alberta) May 11, 2016
WATCH: Firefighters work desperately to save burning house in Fort McMurray. https://t.co/KCmdhGPzha #ymmfire
— Global Edmonton (@GlobalEdmonton) May 12, 2016
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