United Insurance Holdings (UIHC) has renewed its 2023-24 catastrophe reinsurance programs, purchasing $1.32bn of occurrence-based limit for subsidiary American Coastal Insurance Company (ACIC) and another $82mn occurrence-based limit for Interboro Insurance Company (ICC).
Compared to the $2.52bn of occurrence-based limit in the aggregate purchased for ACIC’s 2022-23 core cat reinsurance program, the most recent renewal decreased 47.6%.
According to UIHC the year-over-year decrease in reinsurance coverage was driven by the divestiture of the company’s personal lines writer, United Property & Casualty Insurance Company (UPCIC), which was a party to the catastrophe reinsurance program in the prior years.
Perils covered include earthquake and windstorms named or numbered by the National Hurricane Center. For all-other perils, ACIC placed a separate catastrophe excess of loss program on January 1, 2023.
First and second event retention of up to $10m per occurrence, a 39% decrease from the $16.4m in the 2022/23 Core CAT program. Occurrence-based structure with estimated first event limit of $1.064bn and second event limit of $258m.
For the Florida Hurricane Catastrophe Fund (FHCF) Reimbursement Contract effective June 1, 2023, ACIC elected 90% coverage.
This total mandatory FHCF layer will provide approximately $598.7m of total Florida-only coverage attaching at $305.1m and exhausting at $970.3m, which inures to the benefit of ACIC’s open market cat reinsurance program.
ICC’s 2023-24 reinsurance coverage also saw a decrease, it went down 56.3%, from the $187.6m of limit per occurrence in 2022/23.
The year-over-year decrease was driven by the termination of the inter-company quota share with UPCIC, which was divested from the company, as it relates to assumed New York policies, UIHC explained.
Coverage includes all catastrophe perils underwritten by IIC in New York. UIHC noted that first and second event retention of $3m per occurrence is unchanged from the 2022/23 program.
Aggregate limit of $114m, also saw a decrease of 53.5%, from the $245.2m of aggregate limit in 2022/23
The program also has sufficient coverage for approximately a 1-in-130-year event; and a 1-in-100-year event followed by a 1-in-50-year event in the same season.
The total cost of IIC’s 2023/24 catastrophe excess of loss reinsurance programs is approximately $9.1m, a 45.2% decrease compared to the $16.6m of total cost for IIC’s 2022/23 catastrophe excess of loss reinsurance program.
