The National Security Group, Inc. Releases Estimates of Second Quarter Catastrophe Losses – Company Wire

17July 2020

ELBA, Ala.–( SERVICES WIRE)– The National Security Group, Inc. (NASDAQ: NSEC )launched a preliminary price quote of catastrophe losses(described as “feline events”or & “disaster occasions” throughout the remainder of this release )from residential or commercial property and casualty subsidiary National Security Fire & Casualty(NSFC)for the 3 and six months periods ending June 30, 2020. During the 2nd quarter of 2020, NSFC was negatively impacted by multiple serious weather condition occasions that contributed to raised insured losses due to damage from strong winds, hail and twisters. NSFC was impacted by 15 disaster occasions which produced 1,464 reported policyholder claims amounting to $9,739,000. In contrast, NSFC was impacted by 11 disaster events throughout the 2nd quarter of 2019 from 378 reported claims amounting to $1,908,000. April of 2020 was our most active month of any spring storm season considering that 2011, with six feline occasions happening throughout the month. These 6 cat events impacted policyholders in every state in which NSFC operates and created $7,806,000 in insured losses throughout the second quarter of 2020 from 1,133 reported claims through June 30, 2020. For contrast, in April of 2019, we sustained losses from five cat events amounting to $1,092,000 from 221 reported claims.

For the very first six months of 2020, NSFC had 2,002 reported claims from 20 cat events through June 30, 2020 amounting to $11,991,000. In contrast, NSFC was impacted by 14 feline occasions through June 30, 2019 from 519 reported claims amounting to $2,863,000. Our second quarter and year to date outcomes of operations for the duration ended June 30, 2020 will be materially impacted by these catastrophe losses.

Three of the largest current year cat occasions happened from April 10, 2020 through April 24, 2020. Claims reported through June 30, 2020 from these three feline occasions amounted to $7,396,000 and represented 75.9% of all second quarter 2020 disaster losses affecting NSFC.

The Business keeps catastrophe reinsurance protection to reduce loss exposure from devastating events. With our 2020 disaster contract placement, our single event catastrophe retention remained the same from the previous year at $4 million. In our 2020 agreement, we kept our underlying 2nd occasion layer of $2 million in excess of $2 million. This extra coverage successfully reduces our second event retention to $2 million. Likewise the same from in 2015, we maintain catastrophe reinsurance covering incurred claims of a single catastrophe occasion up to $72.5 million. Our disaster reinsurance has a reinstatement provision for one occasion and covers the expense of a 2nd event as much as the same $72.5 million upper limit. While we were impacted by numerous disaster occasions in the second quarter of 2020, based on existing development none of these events individually surpassed our $4 million very first occasion catastrophe reinsurance retention.

After a significant decline in late February and March, our investment portfolio enhanced substantially in the second quarter of 2020 with consolidated pre-tax gains totaling approximately $4 million. The boost was primarily connected to net financial investment gains in equity securities coupled with an increase in latent gains in fixed maturity securities.

About The National Security Group, Inc

The National Security Group, Inc. (NASDAQ Sign: NSEC), through its residential or commercial property and casualty and life insurance coverage subsidiaries, offers residential or commercial property, casualty, life, accident and health insurance in ten states. The Company mainly composes individual lines residential or commercial property protection including specialized market residence fire and windstorm, house owners and mobile homeowners lines of insurance coverage. The Business also provides life, accident and health, extra health center and cancer insurance products. The Company was established in 1947 and is based in Elba, Alabama. Additional details about the Business, including extra information of current financial results, can be discovered on our website: www.nationalsecuritygroup.com. Information about positive statements Any declaration included in this report which is not a historical reality, or which may otherwise be considered an opinion or forecast worrying the Business or its business, whether expressed or suggested, is indicated as and should be thought about a positive statement as that term is specified in the Private Securities Litigation Reform Act of 1995. Forward-looking declarations are based on presumptions and opinions concerning a range of known and unidentified dangers, consisting of however not limited to modifications in market conditions, natural disasters and other disastrous occasions, increased competition, changes in availability and cost of reinsurance, modifications in governmental policies, technological modifications, political and legal contingencies and basic economic conditions, as well as other threats and uncertainties more completely described in the Business’s filings with the Securities and Exchange Commission. If any of these assumptions or opinions proves inaccurate, any forward-looking declarations made on the basis of such assumptions or opinions may also show materially incorrect in one or more respects and may trigger future outcomes to vary materially from those contemplated, predicted, estimated or allocated in such forward-looking statements.

Significant unpredictabilities still remain regarding the supreme impacts of the COVID-19 pandemic on future premium, losses and investment results. These uncertainties could have a product adverse influence on our earnings and results of operations. Extra information and disclosures associated with run the risk of elements are gone over in our 2019 Annual Report on Form 10-K in addition to our latest Form 10-Q and ought to read in conjunction with this Type 8-K.

Source: businesswire.com

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