Hartford Financial Services Group Inc.'s (HIG) losses from superstorm Sandy may reach $350 million, the level at which the company's reinsurance kicks in, Chief Executive Liam McGee said.For claims costs in excess of $350 million, Hartford pays just 10% of losses, while its reinsurance program picks up the rest of the costs, Mr. McGee said at a Goldman Sachs Group Inc. (GS) conference Wednesday.
About 60% of the costs will be from commercial insurance policies, with the rest of the claims coming from consumer- related coverage like homeowners and auto insurance, Mr. McGee said.
Mr. McGee said Hartford would have a more-specific estimate of Sandy's costs "soon." He reiterated his statement from the days just after the storm, when he said the cost of the massive storm would be manageable for the insurer.
Still, he said the company would re-examine its risk-management practices in the wake of the storm.
"Undoubtedly, the weather has changed," he said Wednesday, predicting the insurance industry will be "even more disciplined" in raising prices for lines of coverage that can pay out when natural disasters strike. "As an industry, we have to assume this is the new normal," he said.
Larger rival Travelers Cos. said earlier Wednesday it estimates the storm could cost $650 million. Allstate Corp. (ALL) last week said it expected its Sandy tally would reach nearly $1.08 billion. Both estimates are after taxes and reinsurance.