Republic Companies Group, Inc. Comments on Hurricane Katrina Losses
14 Settembre 2005 - 3:14AM
PR Newswire (US)
DALLAS, Sept. 13 /PRNewswire-FirstCall/ -- Republic Companies
Group, Inc. (NASDAQ:RUTX) ("Republic") today released information
regarding its response to Hurricane Katrina and the financial
effects of this Category 4 hurricane on the third quarter results
of Republic. In summary, the Company's personnel and
representatives have been mobilized to assist policyholders since
August 30th, the day following the onslaught of this devastating
storm. While responding fully to its responsibilities to
policyholders, the financial effect on Republic's financials should
be within the loss expected from a major wind-related catastrophe.
Specifically, the after tax impact on Republic's third quarter net
income, net of recoveries from catastrophe reinsurance treaties, is
estimated at approximately $3.3 million. Member companies of The
Republic Group provide insurance for windstorm damage and related
risks to homes, automobiles and commercial businesses in Louisiana.
Consistent with industry practice, Republic's policy terms do not
include losses related to flood damage. Republic has no property
risks in Alabama, Mississippi or Florida, the other states struck
by Katrina. Parker Rush, President and Chief Executive Officer
commented, "We know this is a difficult time for our policyholders
and independent agents residing in Katrina's path. We are working
to assist them in rebuilding their lives and their businesses. This
is a particularly trying process for all parties, as physical
access to the areas damaged by Katrina remains difficult for
policyholders and for our claims representatives who are attempting
to provide assistance. In addition to responding to contractually
insured obligations to our policyholders and independent agents,
Republic and its employees are providing other financial and
volunteer assistance to residents impacted by Hurricane Katrina."
The losses related to Katrina are a subject of continuing
assessment, and the mix of insured losses to total losses is
particularly complex in this case. As such, Republic is not yet
able to fully assess the gross losses incurred by the Company as a
result of Hurricane Katrina. However, sufficient information is now
available to report that we expect the gross loss to be within the
limits of the Company's excess of loss reinsurance coverage. This
estimate is preliminary and based on broad assumptions about
coverage, damage and reinsurance including claims received to date,
industry loss estimates, estimates from industry and proprietary
models, and contract language, among other factors. Republic's
comprehensive reinsurance program is comprised of several layers of
catastrophe reinsurance agreements and is placed with reinsurers
having an A.M. Best Rating of A- (Excellent) or better. The program
not only provides protection against direct insured losses from a
large catastrophic event like Hurricane Katrina, but also protects
the Company against indirect losses which are assessed by state
coastal insurance plans and wind pool insurance associations to
cover a portion of their losses from such events. Republic's before
tax net retained participation in the losses related to Katrina,
after recovery of the several reinsurance layers is $5 million.
Further, Republic has purchased additional reinsurance, such that
the Company now has coverage for reimbursement from its insurers in
the case of a possible second and third substantial catastrophic
event in 2005. 2005 Guidance For the full year 2005, Republic
continues to anticipate providing a return on average equity that
is in the range of 13% to 15%. About Republic Republic Companies
Group, Inc. is a holding company of a group of insurance companies
and related entities that provide personal and commercial property
and casualty insurance products to individuals and small to medium-
size businesses primarily in Texas, Louisiana, Oklahoma and New
Mexico. Our focus on this large and fast-growing region helps us
identify profitable underserved niche opportunities primarily in
rural and small to medium-size metropolitan areas. We have written
insurance in Texas consistently throughout our entire 101-year
history and have developed market knowledge and a loyal network of
independent agents and a select group of managing general agents
who provide us access to what we believe are among the most
profitable markets. We are rated A- (Excellent) by A.M. Best
Company, Inc. with a stable outlook. We completed our Initial
Public Offering in early August, 2005. Precautionary Statement
Regarding Forward-Looking Information Some of the statements in
this press release may include forward-looking statements, as that
term is defined in the Private Securities Litigation Reform Act of
1995 (PSLRA), that reflect our current views with respect to future
events and financial performance. These forward-looking statements,
which may apply to us specifically or the insurance industry in
general, are made pursuant to the safe harbor provisions of the
PSLRA and include estimates and assumptions related to economic,
competitive, regulatory, judicial, legislative and other
developments. All forward-looking statements address matters that
involve risks and uncertainties. If one or more of these or other
risks or uncertainties materialize, or if our underlying
assumptions otherwise prove to be incorrect, our actual results may
vary materially from what we project. You should read the
additional information regarding these and other risk factors and
uncertainties which may be found in Republic Companies Group,
Inc.'s filings with the Securities and Exchange Commission
(available at http://www.sec.gov/ ). Unless otherwise required by
law, we undertake no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future developments or otherwise. All subsequent written and oral
forward-looking statements attributable to us or individuals acting
on our behalf are expressly qualified in their entirety by this
paragraph.
http://www.newscom.com/cgi-bin/prnh/20050801/REPUBLICLOGO
http://photoarchive.ap.org/ DATASOURCE: Republic Companies Group,
Inc. CONTACT: media and investors, Michael E. Ditto, Esq., Vice
President, General Counsel and Secretary of Republic Companies
Group, Inc., +1-972-788-6100 Web site:
http://www.republicgroup.com/
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