U-Haul Parent to Strengthen Loss Reserves on Discontinued Workers’ Comp Business

Reno, Nev.-based AMERCO (Nasdaq: UHAL) announced earlier this month that following an internal review of its property and casualty subsidiary’s excess workers’ compensation business, Repwest will take a third quarter fiscal 2012 charge to strengthen its loss reserves.

The additional reserves relate to excess workers’ compensation policies Repwest either wrote or assumed from other insurance carriers between 1983 and 2003. These policies cover risks totally unrelated to U-Haul’s core moving and storage business and Repwest has not written or assumed business of this nature in nearly a decade, according to a statement from the company.

During the quarter Repwest undertook the comprehensive review of this discontinued line of business and found that claims have been developing much more adversely than previously anticipated, the company stated.

The company said that total after-tax charge for this reserve strengthening in the third was $31 million. This was a non-cash adjustment and does not necessitate any capital contributions from AMERCO, and as a result of the charge, Repwest anticipates incurring a net loss after tax of $28 million in the third quarter of fiscal 2012, according to the company.

AMERCO is best known through its subsidiary, U-Haul International Inc., a moving and storage operator that supplies products and services, including the famous U-Haul trucks, to help people move and store their goods in the U.S. and Canada.