Reinsurance News

United grows all other perils catastrophe reinsurance at renewal

10th January 2020 - Author: Luke Gallin

United Insurance Holdings Corp. (UPC Insurance) has announced the successful renewal of its reinsurance arrangements for 2020, through its wholly owned insurance subsidiaries American Coastal Insurance Company, United Property and Casualty Insurance Company, Family Security Insurance Company, and Interboro Insurance Company.

Specifically, UPC Insurance has renewed its aggregate excess of loss reinsurance agreement, its all other perils catastrophe excess of loss agreement, and its personal property excess per risk agreement, all of which are effective January 1st, 2020.

The insurer’s aggregate excess of loss reinsurance renewal was again completed with a single, private reinsurer on a fully collateralized basis, and provides the firm with protection against all catastrophe perils excluding hurricanes, tropical storms, tropical depressions, and earthquakes.

UPC Insurance is set to retain, in the aggregate, 100% of those losses up to approximately 7% of the covered companies’ subject gross earned premiums. This means that the reinsurance company is liable for all losses in excess of the covered companies’ retention in the aggregate not to exceed USD 30 million over the duration of the agreement.

The above represents a slight change from the previous year, when, under the terms of its aggregate excess of loss treaty, UPC Insurance retained, in the aggregate, 100% of those losses up to 5.75% of the covered companies’ gross earned premium. So, for 2020, the firm’s retention in the aggregate has increased slightly year-on-year.

Another change for 2020 can be seen with UPC Insurance’s all other perils catastrophe excess of loss arrangement, which was renewed with private reinsurers all rated A- or better by A.M. Best. This agreement, which provides cover from cat events excluding named windstorms and earthquakes, provides UPC Insurance with reinsurance protection of up to USD 110 million. This is an increase of USD 10 million when compared with the previous year.

“Additionally, the Company increased its aggregate protection provided under this agreement by adding a prepaid reinstatement to the $30 million of limit provided by second layer of the program,” explains UPC Insurance.

The insurer has also renewed its personal property excess per risk reinsurance agreement for 2020, unchanged from the previous year. This slice of cover provides the firm with USD 2.5 million of limit excess of USD 1.5 million to limit its personal property exposure to non-cat losses from any one claim. The reinsurer’s maximum liability for all losses through the duration of the treaty is USD 7.5 million.

Overall, UPC Insurance’s reinsurance renewals aren’t too dissimilar to last year, with the exception of a slightly higher retention in its aggregate excess of loss treaty and a USD 10 million rise in protection secured across its all other perils catastrophe excess of loss reinsurance arrangement.

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