American Financial Group Inc. has initially estimated a pretax loss from various catastrophe events in the third quarter of about $105 million, or 95 cents per share after tax.
The estimates include expected losses from hurricanes Harvey, Irma and Maria and two earthquakes in Mexico. The estimates are net of reinsurance coverage and inclusive of reinstatement premiums and other associated offsets.
American Financial Group maintains comprehensive catastrophe reinsurance coverage, including a $15 million per occurrence net retention for its U.S.-based property and casualty operations and a separate $15 million per occurrence retention for Neon. After Hurricane Irma, the company's operating units bought replacement reinsurance coverage for the layers of the catastrophe reinsurance program expected to be affected by hurricanes Harvey and Irma. The P&C operations further maintain supplemental fully collateralized reinsurance coverage up to 95% of $200 million for catastrophe losses in excess of $100 million of traditional catastrophe reinsurance through a catastrophe bond.
The expected catastrophe losses incurred will not preclude the company from considering a special dividend payment in the fourth quarter.