The National Security Group, Inc. Releases Estimates of Catastrophe Losses from Hurricane Florence

ELBA, Ala.–(BUSINESS WIRE)–The National Security Group, Inc. (NASDAQ:NSEC) released estimates of
reported catastrophe losses from Hurricane Florence incurred by property
and casualty subsidiary National Security Fire & Casualty Company.

On September 14, 2018, Hurricane Florence made landfall along the
southern coast of North Carolina near Wrightsville Beach. At landfall,
Florence was a Category 1 hurricane with winds of approximately 90 mph
with higher gusts in some areas. By the end of the day, Florence
weakened to a tropical storm but battered the North and South Carolina
coasts with strong wind and heavy rain. On September 15th, Florence
remained a tropical storm and slowly moved southwest into South
Carolina. On September 16th, the storm weakened to a tropical depression
and moved west through South Carolina before eventually turning north.
Due to the limited geographic area exposed to hurricane and tropical
storm force winds, insured losses of our policyholders due to Hurricane
Florence are expected to be limited to the state of South Carolina. We
do not insure property in North Carolina.

Based on management’s analysis of historical reporting patterns,
preliminary post event model output and assessment of early reports of
claims to date, we estimate our ultimate gross losses from Hurricane
Florence to be in the range of $1,000,000 to $1,500,000. We expect
losses, net of tax, from Hurricane Florence to reduce our third quarter
and year-to-date earnings in the range of $790,000 ($0.31 per share) to
$1,185,000 ($0.47 per share).

We maintain catastrophe reinsurance that provides coverage from a
catastrophe event up to $72.5 million subject to a $4 million per event
retention. We also prepay reinstatement premium protection which
provides additional coverage for a subsequent event that exceeds the $4
million per event retention level. Based on estimates outlined above, we
do not expect losses from Hurricane Florence to exceed our per event
retention level under our catastrophe reinsurance program.

The National Security Group, Inc. (NASDAQ Symbol: NSEC), through its
property & casualty (P&C) and life insurance subsidiaries, offers
property, casualty, life, accident and health insurance in ten states.
The Company writes primarily personal lines property coverage including
dwelling fire and windstorm, homeowners, and mobile homeowners lines of
insurance. The Company also offers life, accident and health,
supplemental hospital and cancer insurance products. The Company was
founded in 1947 and is based in Elba, Alabama. Additional information
about the Company, including additional details of recent financial
results, can be found on our website:

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 within the
meaning of the “safe harbor” provisions of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. 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 could cause actual results to vary
materially from our expected results. Please refer to the Company’s
Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q filed
with the Securities and Exchange Commission for information concerning
the important factors that can cause results to differ materially from
these forward-looking statements.


The National Security Group, Inc.
Brian McLeod, 334-897-2273
Financial Officer

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