Heritage Insurance Holdings, Inc., a super-regional property and casualty insurance holding company, has announced details of its 2022-2023 catastrophe reinsurance program.
The total cost of program is $359.5 million, accounting for 31% of March 31, 2022, premiums-in-force, which is three points higher than the prior year cost.
The coverage applies to Heritages insurance subsidiaries, which include Heritage Property Casualty Insurance Company, Narragansett Bay Insurance Company and Zephyr Insurance Company.
Heritage explained that the first event reinsurance tower exhaustion points of $1.2 billion for the Northeast, $1.3 billion in the Southeast and $780.0 million in Hawaii with no co-participations in the syndicated program.
Program and costs include a limit of $100 million from catastrophe bonds issued by Heritage’s special purpose vehicle, Citrus Re Ltd., which provides multi-year reinsurance protection at a cost of $5.1million.
Also at renewal, Heritage secured first event consolidated loss retention in the Southeast and Hawaii of $40.0 million, and $30.0 million in the Northeast. Individual Insurance companies will be less given the use of captive Osprey Re.
And it continues to utilise Florida Hurricane Catastrophe Fund participation of 90%, consistent with the prior year program.
“We are pleased to have completed our catastrophe reinsurance program integrating indemnity-based traditional reinsurance and insurance-linked securities,” a representative from Heritage commented.
“Our longstanding relationships with existing reinsurers as well as going to the market early contributed to the success of our placement. I was also pleased that the Company’s program had reached a level of maturity making the new RAP program unnecessary to complete the risk transfer,” they continued.
“Our super-regional strategy allowed for an orderly placement with our partners in these markets despite deteriorating capacity for Florida risk.”
In addition, Heritage proactively suspended the offering of new personal residential policies in various counties in Florida, effective June 3, 2022, as the company evaluates the impact of recent legislation on the homeowner’s insurance marketplace and awaits further changes in Florida.
The company says the suspension will be temporary and remains dedicated to the Florida market, but added that it will “continue to evaluate options and the overall strategy in Florida” which could entail additional suspensions or openings.
