Palomar has said that it is to use its reinsurance cover to offset losses arising from Hurricane Ian in Q3 2022.
The firm said that it was looking at estimated pre-tax catastrophe losses of $12.5m, net of reinsurance, for the third quarter of 2022. This is a full-retention loss for Palomar, which means that Hurricane Ian will result in reinsurance recoveries.
The losses from Hurricane Ian also result in additional ceded reinsurance premium of $3.1m, with $1.3m recognized in the third quarter of 2022 and the remaining $1.8m recognized ratably from October 1, 2022 to May 31, 2023.
The firm said that its financial closing and review procedures for the fiscal quarter are not yet complete. It added that its loss estimates are subject to change due to the complexity of the claims and preliminary nature of the information available to prepare the estimates. Updated catastrophe loss estimates will be reflected in the company’s Q3 2022 results.
As we wrote back in June, the firm has $900m of reinsurance available for hurricane-loss events.
The firm said then that it had procured approximately $430m of incremental limit for earthquakes and $200m of incremental windstorm limit. Its reinsurance coverage now exhausts at $2.08bn for earthquake events and $900m for hurricane events. Palomar also said that it had maintained its catastrophe event retention of $12.5m for all perils. Additionally, the Company completely placed the excess of loss layers of its catastrophe program. The $12.5m per occurrence pre-tax retention is further backstopped by the $25m catastrophe aggregate excess of loss cover renewed on April 1, 2022.
