Specialty insurer Palomar has secured $25 million of aggregate excess of loss reinsurance providing coverage to across all perils above a qualifying level of $2 million.
The cover has an attachment point of $30 million.
Palomar also announced an estimated range of pretax catastrophe losses of between $15 million and $16.5 million for the fourth quarter of 2020 and approximately $1.5 million of favorable development from third quarter 2020 storms.
Fourth quarter loss estimates represent anticipated losses from Hurricanes Delta and Zeta. Total net catastrophe losses for the quarter are expected to be between $14 and $15 million.
The losses do not incorporate the previously announced exit of the Admitted Commercial All Risk segment or other underwriting changes put into place during the fourth quarter.
The impact of those measures would have reduced net losses in the quarter to approximately $5 million.
During Q4 the company incurred an expense acceleration of $4.1 million related to the original reinsurance layer providing $20 million of coverage in excess of $10 million.
This layer was fully utilized due to severe weather activity in the second half of 2020 and the company subsequently placed a backup layer to provide equivalent coverage through June 1, 2021.
A portion of this backup layer was utilized during the fourth quarter, resulting in a reinstatement premium of $0.8 million, but the layer remains in place for storms and earthquakes through its expiration.
