Florida-based American Coastal Insurance Corporation (ACIC) has renewed its catastrophe excess of loss agreement (AOP CAT agreement), which provides up to $90 million in per-occurrence coverage above a $10 million attachment point, and has also secured $40 million in aggregate catastrophe limit at the January renewals.
The AOP CAT agreement, facilitated through ACIC’s wholly owned insurance subsidiary, American Coastal Insurance Company, is reportedly designed to limit the firm’s losses from catastrophic events other than named windstorms and earthquakes, covering in-force, new, and renewal business. It is effective from January 1, 2025.
The firm’s wholly owned reinsurance subsidiary, Shoreline Re, is a participant in the AOP CAT agreement, bringing ACIC’s consolidated retention to $9.8 million per occurrence, net of inuring quota share reinsurance coverage.
The cost of the agreement is approximately $11.9 million, a risk adjusted decrease of -8% year-over-year.
ACIC explained that exclusive of its retention, the AOP CAT agreement provides coverage of approximately $88.2 million for a first event and $88.2 million for a second event, or $176.4 million in the aggregate, an aggregate increase of $4.4 million or 2.6% year over year.
In addition, the attachment point decreased $4 million or 28.6% year-over-year from $14 million to $10 million.
As mentioned, ACIC, through AmCoastal, has also purchased a new catastrophe aggregate excess of loss agreement (CAT Agg agreement), which provides coverage for in-force, new and renewal business.
Also effective January 1, 2025, the new CAT Agg provides a $40 million aggregate limit (with a $20 million per occurrence cap) excess of zero after the $40 million annual aggregate deductible has been exceeded.
ACIC stated that this agreement limits losses from all catastrophe loss events, including named windstorms, severe convective storms and winter storm events for the full year ending December 31, 2025. The cost of the agreement is approximately $6.6 million.
