Allied World expects $40 million crop losses

Severe drought conditions in the Midwest United States are expected to cause $40 million of crop reinsurance related losses and loss expenses for Allied World Assurance Company (AWAC) in the third quarter of 2012.

These losses are also in addition to the AWAC's anticipated losses and loss expenses for its crop business prior to onset of the drought.

AWAC also expects to record between $5-10 million in losses and loss expenses in the quarter for Hurricane Isaac, which struck the Gulf Coast of the United States in late August 2012.