U.S. primary insurer The Hartford is “very pleased” with the placements and terms and conditions for its core per occurrence and aggregate reinsurance treaties the company renewed at the January 1, 2024, reinsurance renewals.
Alongside the release of its fourth quarter and full year 2023 financial results last week, property and casualty (P&C) insurer The Hartford provided details of its catastrophe reinsurance coverages for the year ahead.
For its core per occurrence property catastrophe treaty, a change from the 2023 programme includes a $50 million increase in retention to $200 million.
Above the retention sits a $150 million layer of protection up to $350 million for losses from one event other than earthquakes and named hurricanes and tropical storms. For 2024, this layer covers 40% of $150 million in losses in excess of $200 million, whereas in 2023 it covered 60% of $200 million in losses in excess of $150 million.
For losses of $350 million to $500 million from one event, The Hartford secured all perils protection, placed 75%, which is unchanged from the 2023 programme.
Above this, so covering losses of $500 million to $1.2 billion from one event, sits the largest slice of all perils reinsurance protection, with 90% of the $700 million placed in excess of $500 million. Compared with last year, The Hartford decided to increase this layer of capacity from $600 million to $700 million for 2024.
Commenting on the firm’s renewal during a recent earnings call, Chief Financial Officer (CFO), Beth Bombara, said: “Overall, we were very pleased with the placements and terms and conditions for our program.
“Our expiring core per occurrence catastrophe protection was renewed at an approximate 5% decrease in cost on a risk-adjusted basis, which based on publicly available information, compares favorably with the overall market, and speaks to the quality of our book of business, strong reinsurer relationships and favorable experience.”
“There were some minor changes in the treaty that provides coverage for certain loss events under $350 million, but overall, the structure of our property CAT program did not change significantly,” she added.
Additionally, The Hartford secured a further $300 million layer on top of its programme through a combination of traditional reinsurance and the sponsorship of Foundation Re IV Ltd. (Series 2023-1), its $200 million US named storm and earthquake catastrophe bond transaction.
This deal provides the firm with indemnity per occurrence excess of loss coverage for tropical cyclone and earthquake events of 66.67% of $300 million in losses in excess of $1.1 billion for the treaty term effective January 1, 2024, through December 31, 2026.
“The addition of cat bond protection furthers our goal of securing diversified, strongly rated protection that affords durability in both cost and availability. The majority of our occurrence protection is secured on a multi-year basis.
“As of January 1, we have protection up to a gross loss event of $1.4 billion,” said Bombara.
The Hartford also renewed its aggregate property catastrophe treaty “under the same structure and term with favorable pricing from a risk-adjusted perspective.”
This layer of protection kicks in at $750 million and covers aggregate losses up to $950 million.
“And in addition to our property catastrophe program, we also successfully renewed several other reinsurance treaties that experienced limited changes in terms, conditions and rates,” said Bombara.
