New York-headquartered Assurant Inc. has secured a $1.3 billion 2018 catastrophe reinsurance program that protects nearly 3 million homeowners and renters policyholders against severe weather events.
The main reinsurance program provides the firm with $985 million of coverage in excess of a $120 million retention.
The 2018 U.S. program includes U.S. per-occurrence coverage that protects the company’s projected probable maximum loss (PML) for approximately a 1 in 170-year storm. As a result, the probability of exceeding the top of the program in one year is less than 1%.
Furthermore, multiyear reinsurance contracts cover 32% of the $855 million layers in excess of $240 million, and, “all layers of the program allow for one automatic reinstatement and include a cascading feature that provides multi-event protection in which higher coverage layers drop down as the lower layers and reinstatement limit are exhausted,” explains Assurant.
Included in the amount is an extension of its 2017 Latin America protection, set to renew September 1st, 2018.
Premiums for the program are estimated at $121 million, down from $126 million in 2017. Assurant’s declining catastrophe exposure within its lender placed insurance offering is considered a driver of this reduction.
The program also includes Florida Hurricane Catastrophe Fund (FHCF) coverage for losses up to 90% of $283 million, in excess of an $88 million retention. In the event of a Florida hurricane, this coverage will be utilised prior to the main U.S. reinsurance program.
The program is covered for gross Florida losses of up to $1.4 billion, approximately a 1-250-year Florida event based on projected modeled loss estimates.
Assurant states that the program (below) was placed with more than 40 reinsurers that are all rated A- or better by A.M. Best,
International per-occurrence catastrophe coverage has increased and includes Caribbean protection of up to $162.5 million in excess of a $17.5 million retention, and Latin America protection of up to $183.5 million in excess of a $4.5 million retention.
This is an extension of 2017’s protection that will renew on September 1, 2018 and is subject to changes in coverage amount and retention. In these regions, Assurant’s product offerings are primarily residential dwelling policies covering the structure and contents.
Commenting on the announcement, President of Assurant Global Home, Michael P. Campbell, said, “In 2017, our catastrophe reinsurance program proved strong and resilient, absorbing over $600 million in total gross losses, and more importantly Assurant was able to support policyholders during their time of need.”
“This year, we’ve secured comprehensive catastrophe coverage with attractive terms and conditions due to our risk management expertise and strong relationships with our reinsurance partners.”
“Assurant is not only dedicated to providing protection to our policyholders but also to our shareholders, as we gradually reduce our overall net loss retention, in conjunction with our declining exposure, over time,” added Campbell.