Donegal expects the new program to outperform expiring reinsurance programs in terms of managing volatility and preserving capital.
Preliminary Q4 results: The company expects a Q4 net loss of 53 cents-55 cents per class A share (consensus estimate is EPS of 11 cents) as a result of increased claim activity and expected net investment losses of $6.9M, or 25 cents per class A share, primarily related to mark-to-market adjustment of equity securities held at Dec. 31, 2018.
Sees weather-related losses of about $12.5M, including about $4.1M of losses from Hurricane Michael, in Q4, higher than Donegal's previous five-year average for Q4 weather-related losses of $5.2M.
Donegal also saw higher loss severity trends in personal and commercial automobile lines of business.
Adds ~$6.5M to its loss and loss expense reserves for personal and commercial auto losses in accident years prior to 2018
Expects Q4 combined ratio of 110.0%-111.0%.
Previously: Donegal Group misses by $0.14, beats on revenue (Oct. 30, 2018)
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