AmTrust Financial Services, Inc. has announced that it’s entered into a new quota share reinsurance arrangement with multiple reinsurance companies, in order to reduce its catastrophe and non-catastrophe event exposure in relation to the operations of its subsidiary, Republic Companies, Inc.
The new quota share arrangement is effective August 1st, 2017, and covers Republic Companies’ personal property policies, and the contract has a cession rate of 62.5%. The new reinsurance contract will work alongside the firm’s current excess of loss reinsurance programs for both catastrophe and non-catastrophe events, explained AmTrust in a statement.
AmTrust’s excess of loss reinsurance programs, as of July 1st, 2017, offers coverage for losses above $20 million, with a per event limit of $830 million. The firm explains that while it is still too early to provide an ultimate loss in relation to hurricane Harvey, it does not expect the loss from this event to exceed $20 million.
The company states that the new quota share further reduces its exposure and lowers any financial volatility in relation to all catastrophe events, including hurricanes and tropical storms.
Barry Zyskind, Chairman and Chief Executive Officer (CEO) of AmTrust, said; “Although property represents a small portion of our overall portfolio from a premium standpoint, we have always taken a conservative approach to our retention, based on our catastrophe models and capital requirements. As we previously stated on our Q2 2017 earnings conference call on August 8, 2017, we intended to reduce volatility related to the Republic book of business by entering into a quota share agreement. This agreement supports our goal of reducing volatility and creating more certainty and confidence in our future financial performance.
“At this time, our thoughts and prayers are with all those facing peril this hurricane season. We are working hard to process all claims as quickly as possible and meet our obligations to our policyholders. We are also giving back to the communities we serve to support the rebuilding efforts.”
