United Insurance Holdings (UPC Insurance) has announced the completion of its 2018 catastrophe reinsurance program, which includes greater frequency and severity protection and an increased, overall program exhaustion point excess of $3.1 billion.
The 2018 reinsurance program, that protects UPC Insurance, via subsidiaries American Coastal Insurance Company, United Property and Casualty Insurance Company, Family Security Insurance Company, Interboro Insurance Company, and BlueLine Cayman Holdings (BlueLine), featured participation from 41 reinsurers.
Effective June 1st, 2018, United has secured $2.185 billion of aggregate open market catastrophe reinsurance protection, against the perils of named or numbered windstorms and earthquakes across all states the insurer and its subsidiaries operate in.
United explains that the main chunk of the program has been structured in multiple layers, using a cascading approach so each layer can drop down to replace any layer that has been exhausted beneath.
The insurer said that this ensures “there are no potential gaps in coverage up to the $3.1 billion program exhaustion point.”
Highlights of its 2018 program include increased frequency and severity protection and an overall program exhaustion point of $3.1 billion. Sufficient protection for a 1-in-400 year event, and sufficient cover for a 1-in-100 year event followed by a 1-in-50 year event in the same season has been secured by United, and the firm notes lower per occurrence retention levels which include all BlueLine business.
This includes a first event retention of $60 million in Florida and $25 million outside of Florida, and $25 million for second event in all states.
United’s program also includes its multi-year, $100 million Armor Re II Ltd (Series 2018-1) catastrophe bond transaction, and up to $262.5 million of multi-year limit including the CAT Bond limit.
Additionally, United opted for 45% participation in the Florida Hurricane Catastrophe Fund (FHCF) coverage, which offers approximately $907 million of aggregate reinsurance cover, at a range of retentions and limits, with three FHCF contracts all inuring to the benefit of the open market reinsurance layers.
Overall, the 2018 program featured 41 reinsurers, and 93% of the open market limit was placed on either a fully collateralized basis, or with reinsurers having an A+ or better A.M. Best financial strength rating.
The total cost of United’s 2018 reinsurance program is approximately $374 million.
