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Kingstone grows reinsurance treaty at 2019 renewal

26th July 2019 - Author: Luke Gallin

Property and casualty (P&C) insurance holding company, Kingstone Companies, Inc. has announced that its wholly-owned subsidiary, Kingstone Insurance Company (KICO), has signed a number of new reinsurance treaties for the treaty year beginning July 1st, 2019.

kingstone-logoFrom a panel of 53 reinsurance companies, KICO secured $602.5 million of catastrophe excess-of-loss reinsurance protection, which represents an increase of 35% on the previous and now expired program.

The firm states that the 35% growth in size is a result of its growth and also the fact that it wanted to maintain coverage above that needed to cover a 1-in-250 year cat event.

Under the catastrophe excess-of-loss treaty, the retention has also increased from $5 million to $7.5 million, and after the direct retention, KICO is covered for up to a $610 million ground-up loss event.

According to KICO, it secured a low-single digit exposure-adjusted rate change when compared with the premium it paid for the expired catastrophe reinsurance treaty, and, the firm also purchased reinstatement premium protection attributable to the 100-year return period, which now sits at $292.5 million of coverage.

The coverage purchased under the program protects the firm up to a 1-in-263 year event, which is in line with the requirements for an “A-Excellent” A.M. Best rating.

In terms of KICO’s per-risk excess-of-loss treaties, the maximum net single retention on any one loss, pre-tax, is $1 million for personal lines, which is up from the $800,000 under the previous program, and $750,000 for commercial lines, which is unchanged.

KICO states that the after-tax impact of any loss remains below 1% of statutory surplus.

In total, KICO secured casualty protection up to a $4.5 million single loss, covering the maximum policy limits that are offered by the firm.

KICO’s personal lines quota share treaty, which it reduced to 10% in August of last year, has been discontinued on a run-off basis, effective July 1st, 2019.

“This was a challenging year in the reinsurance market, but we are satisfied with the success of our renewal. We were able to secure another substantial increase in coverage limit, in line with our continued growth, and were able to retain all incumbent markets and some additional new markets. Reinsurance markets continue to be more favorable for high quality buyers like Kingstone. We were able to achieve consistent terms at fair and relatively favorable pricing levels compared with other similar buyers.

“Our strong and diverse panel of 53 reinsurers include many of the most highly-respected and financially stable carriers in the marketplace. The fact that not a single incumbent left our program while we achieved stable pricing levels highlights the strong relationships that Kingstone and its long-term broker Aon have built with our reinsurers,” said Barry Goldstein, Chairman of Kingstone Companies.

The firm has been purchasing more reinsurance on annual basis, now securing more than $602.5 million of reinsurance protection in 2019 after securing $445 million in 2018, and $315 million in 2017.

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