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United Insurance extends quota share, renews catastrophe reinsurance

7th January 2019 - Author: Charlie Wood

United Insurance Holdings (United) has announced the successful extension of its current 20% catastrophe quota share reinsurance agreement until June 2019, whilst also renewing its catastrophe aggregate and other reinsurance agreements.

Effective 31 December 2018, through its United Property and Casualty Insurance Company (UPC) subsidiary, United extended its 20% quota share agreement to 31 May 2019 with Munich Re, Transatlantic Reinsurance Company (TransRe), and General Reinsurance Corporation (Gen Re).

United says the coverage and terms within the quota share agreement are unchanged for the extension period but that it intends to disclose any future changes concurrently with the renewal of its other catastrophe reinsurance programs around 1 June 2019.

Effective 1 January 2019, United also renewed its aggregate excess of loss reinsurance agreement, which is a fully collateralised arrangement with a single private reinsurer.

This aggregate arrangement covers all subsidiaries, American Coastal Insurance Company, UPC, Family Security Insurance Company, and Interboro Insurance Company, for aggregate losses from all catastrophe perils other than hurricanes, tropical storms, tropical depressions and earthquakes.

Under this agreement, United will retain, in the aggregate, 100% of those losses up to 5.75% of the covered companies’ gross earned premium.

The reinsurer will then be liable for all losses excess of 5.75% of the covered companies’ gross earned premium in the aggregate not to exceed $30 million over the term of the treaty.

Recoveries under this treaty will be calculated quarterly based on the cumulative year-to-date gross earned premium.

United and its subsidiaries also renewed “all other perils” catastrophe excess of loss reinsurance, with private reinsurers all rated A- or better by A.M. Best, which provides $85 million of coverage excess of $15 million per occurrence, to reduce United’s losses from cats other than named windstorms and earthquakes.

Lastly, UPC, Family Security Insurance Company, and Interboro Insurance Company, renewed the personal lines excess per risk agreement with a private reinsurer.

The agreement provides $2.5 million of limit excess of $1.5 million to limit the Company’s personal property exposure to non-catastrophe losses from any one claim. The reinsurer’s maximum liability for all losses during the treaty period is $7.5 million.

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