Reinsurance News

United reports $21m of Q2 cat losses, completes reorganization

27th July 2022 - Author: Matt Sheehan

Property and casualty insurance holding company United Insurance Holdings Corp. (UPC Insurance) has estimated that it incurred catastrophe losses of $21 million during the second quarter of 2022.

This figure is before income taxes and net of expected reinsurance recoveries, UPC explained, with the after tax figure estimated at $17 million.

The company also estimates adverse development on prior year losses incurred during Q2 of approximately $8 million before tax, or $6 million after tax, again net of reinsurance recoveries.

Additionally, UPC Insurance has confirmed the completion of a reorganization plan to consolidate its four Florida domiciled insurance carriers into two.

It plan, which it says will create a more efficient operating structure going forward, merges Family Security Insurance Company, Inc. into United Property & Casualty Insurance Company (United) with United being the surviving entity.

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Journey Insurance Company (Journey) has also been merged into American Coastal Insurance Company with American Coastal Insurance Company being the surviving entity. As part of the merger, $30 million of Journey’s capital was redistributed to United.

Furthermore, UPC says that its cumulative loss position has resulted in the need for a valuation allowance on its deferred tax assets.

The company estimates the valuation allowance for Q2 to be approximately $59 million which will decrease net earnings by approximately $44 million.

The Board of UPC Insurance recently disclosed that it is in the process of undertaking a review of the firm’s strategic and capital raising alternatives, which could lead to a sale or merger.

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