Winter storms projected losses for National Security Group, Inc.
29 February 2008 - 3:00AM
Business Wire
The National Security Group, Inc. (NASDAQ: NSEC): Severe weather in
late January and early February contributed to tornado outbreaks
resulting in reported losses of over $1.1 million in insured losses
incurred by Company subsidiaries National Security Fire and
Casualty Company and Omega One Insurance Company. Management
maintains a comprehensive risk management program to mitigate the
impact of catastrophic events. A primary component of the risk
management program is catastrophe reinsurance, which limits losses
to the Company as a result of catastrophic events above the
Company�s retention, currently $3.5 million. As Catastrophes 26, 27
and 29 did not exceed the Company�s retention (individually or in
total) these losses will have a material impact on the Company�s
first quarter 2008 results of operations. Based on preliminary
estimates, first quarter net income will be reduced by $792
thousand, or a reduction in earnings per share as a result of this
event is expected to be $0.32 per share. The projected impact on
earnings is based on total Company insured losses of $1.2 million
on a pre-tax basis. Loss estimates were derived by an evaluation of
reported claims which is the best information available to
management at this time. The estimates could be materially affected
by, among other things, the number of insureds impacted by the
tornados, the amount and timing of losses actually incurred and
reported by insureds, and the preliminary nature of current
estimates. While a material impact on earnings cannot be avoided,
our ability to continue operations, serve our policyholders and
strive to provide long-term value to our stockholders will not be
affected. About The National Security Group Inc. The National
Security Group Inc. through its insurance subsidiaries provides
property, liability, life, accident and supplemental health
insurance products in thirteen states. Primary property and
casualty insurance subsidiaries are National Security Fire and
Casualty and Omega One Insurance Company, which provide primarily
personal lines dwelling, homeowners, mobile homeowners, and
automobile insurance coverage in twelve states, primarily in the
Southeastern United States. National Security Insurance Company is
a wholly owned subsidiary providing life, accident and supplemental
health insurance coverage in five states. The Company is listed on
the NASDAQ Global Market under the symbol: NSEC. Information about
forward-looking statements Any statement contained in this report
which is not a historical fact, or which might otherwise be
considered an opinion or projection concerning the Company or its
business, whether expressed or implied, is meant as and should be
considered a forward-looking statement as that term is defined in
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on assumptions and opinions
concerning a variety of known and unknown risks, including but not
limited to changes in market conditions, natural disasters and
other catastrophic events, increased competition, changes in
availability and cost of reinsurance, changes in governmental
regulations, technological changes, political and legal
contingencies and general economic conditions, as well as other
risks and uncertainties more completely described in the Company�s
filings with the Securities and Exchange Commission. If any of
these assumptions or opinions proves incorrect, any forward-looking
statements made on the basis of such assumptions or opinions may
also prove materially incorrect in one or more respects and may
cause future results to differ materially from those contemplated,
projected, estimated or budgeted in such forward-looking
statements.
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