SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2020

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

In the preparation of the accompanying financial statements, Management has evaluated subsequent events and their potential effects on these condensed consolidated financial statements through the filing date of this Form 10-Q.

COVID-19

Subsequent to December 31, 2019, the spread of the COVID-19 pandemic has had a profound impact on our daily living, the worldwide economy, global financial markets and interruptions to normal business activities. As of the date of issuance of these financial statements, based on the information presently available, we expect the effect of COVID-19 on claims currently under our coverages to be manageable. However, the effects of the COVID-19 pandemic continue to evolve. The geographic location of our home office allows employees to easily commute without the use of public transportation and efficiency efforts of the past decade has allowed us to better utilize our office space to facilitate social distancing. We have also reduced staff concentration through the broader use of remote work arrangements.  We have remained fully operational through "shelter in place" and similar directives with the exception of limiting travel of certain field staff. Despite our best efforts, we cannot predict the extent to which our business will be impacted, including: results of operations, financial condition, liquidity, capital position, the value of our investments, premiums and the demand for our insurance products and how our ability to collect premiums will ultimately be impacted. See additional commentary included in Part I, Item 2. - Management's Discussion and Analysis of Financial Condition and Results of Operations and Item 3. - Quantitative and Qualitative Disclosures About Market Risk of this Quarterly Report on Form 10-Q.

Catastrophe Losses

In April 2020, the Company's property and casualty subsidiary incurred an increase in claims due to a high frequency of severe thunderstorm, hail and tornado losses that occurred throughout the month. It has been determined that six separate catastrophe events occurred across the eight states in which the property and casualty subsidiary operates. While none of these events were individually significant enough to exceed our retention under our catastrophe reinsurance agreements, the cumulative losses from all events will materially impact our second quarter results of

operations. Claims reported from these catastrophe events totaled $6,998,000. These claims will reduce second quarter 2020 net income by $5,528,000. Because these events occurred after the balance sheet date of these financial statements, no provision for these April severe weather losses have been included in these financial statements.