Waterloo, ON (Jul. 30, 2013) – Economical Insurance today released catastrophe loss estimates from the storms and floods in Southern Alberta in June and the Greater Toronto Area in July.
Economical estimates that its loss related to the Southern Alberta floods in June will amount to $30 million after taking into account expected reinsurance recoveries. The company will record the loss estimate in its 2013 second quarter results which are scheduled for release on August 7, 2013.
Economical also estimates that the loss incurred from the July flooding in the Greater Toronto Area will be $30 million net of reinsurance. Economical will record the estimated losses from the Greater Toronto Area flooding in its 2013 third quarter results.
In terms of total insured losses, gross of any reinsurance recovery, Economical estimates that each event will likely fall within a range of $45 to $50 million. Economical Insurance’s property catastrophe reinsurance coverage commences once losses reach $30 million on an individual loss event, after reflecting any other relevant recoveries.
“The damage wrought by these precedent-setting incidents demonstrates that, as a country, we are facing the increasing impact of climate change,” said Karen Gavan, president and CEO. “We were on the ground immediately when our policyholders needed us most to help them restore their lives and rebuild their businesses in the aftermath of the devastation.”
There is considerable uncertainty associated with any loss estimate, which in this instance is further complicated by the inherent uncertainties related to flood events. Economical’s loss estimates are based on claims reported to date, some of which are not fully resolved and there may still be some claims not yet reported to the company. The ultimate loss, therefore, may differ from the current estimate.
About Economical Insurance
Founded in 1871, Economical Insurance is one of Canada’s leading property and casualty insurers, with more than $1.7 billion in premiums and $4.7 billion in assets. Based in Waterloo, this Canadian-owned and operated group services the insurance needs of more than one million customers through 17 branches and service offices across the country. In 2010, Economical announced its decision to become the first federally-regulated mutual property and casualty insurance company to demutualize. Economical is currently reviewing strategic options and will submit a comprehensive demutualization proposal for mutual policyholder approval after the federal government’s completion of demutualization regulations.
Economical Insurance conducts business under the following brands: Economical Insurance, Economical, Western General, Economical Select, Perth Insurance, Federation Insurance and Economical Financial.
Forward looking statements
The statements in this press release regarding our estimated catastrophe losses, and the timing and content of our unreleased financial results are forward-looking statements. In addition, the words “may”, “will”, “would”, “should”, “could”, “expects”, “plans”, “intends”, “trends”, “indications”, “anticipates”, “believes”, “estimates”, “predicts”, “likely” or “potential” or the negative or other variations of these words or other similar or comparable words or phrases, are intended to identify forward-looking statements.
Forward-looking statements are based on estimates and assumptions made by management based on management’s experience and perception of historical trends, current conditions and expected future developments, as well as other factors that management believes are appropriate in the circumstances. Many factors could cause Economical’s actual results, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors: Economical’s ability to accurately assess the risks associated with the insurance policies that it writes; management’s ability to accurately predict future claims frequency or severity; litigation and regulatory actions; and general economic, financial and political conditions.
All of the forward-looking statements included in this press release are qualified by these cautionary statements. These factors are not intended to represent a complete list of the factors that could impact Economical, however, these factors should be considered carefully, and readers should not place undue reliance on forward-looking statements we make. We are under no obligation and have no intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.