Universal Insurance Holdings, Inc. has announced the completion of its combined 2024-2025 reinsurance program, effective June 1, 2024, for its subsidiaries Universal Property & Casualty Insurance Company (UPCIC) and American Platinum Property and Casualty Insurance Company, which provides $2.4 billion of coverage.
The duo have set the top of their combined reinsurance tower for a single All States event, including Florida, to $2.404 billion for 2024, down from the previous year’s just over $2.8 billion, with no material changes to reinsurance partners.
$1.023 billion of this coverage has limits that automatically reinstate to guarantee a certain level of protection in multi-event scenarios, which is an increase of $177 million in aggregate limit available for subsequent events over the 2023-2024 period.
UPCIC’s in-force wind-covered policy count in Florida declined by 25,266 as of March 31st, 2024, resulting in a year-over-year reduction to the top end of the combined first event reinsurance tower for Universal’s insurance subsidiaries.
This year, UPCIC and APPCIC secured $240 million of catastrophe capacity with contractually agreed limits that extend coverage to include the 2025-2026 treaty year. Of the total amount, $165 million of the capacity sits below the Florida Hurricane Catastrophe Fund while $75 million sits above it.
Universal has also revealed that the insurance entities’ All States (including Florida) combined $45 million first event retention loss is unchanged from the prior year.
For the 2024 catastrophe reinsurance program, Universal replaced $217 million of cost-free Reinsurance to Assist Policyholders (RAP) coverage and $150 million of expiring catastrophe bond coverage in the traditional reinsurance market.
The total cost of the 2024-2025 reinsurance program is projected to be approximately 33% of the estimated direct earned premium for the 12-month treaty period, compared to 31.8% last year, reflecting a modest 1.2-point year-over-year increase.
Nephila Capital, Markel, RenaissanceRe, Munich Re, Chubb Tempest Re, Ariel Re, Everest Re and Lloyd’s of London syndicates, were the largest private reinsurance participants in the renewal.
Matthew J. Palmieri, Chief Risk Officer, commented, “We are pleased to announce the completion of the 2024-2025 reinsurance program for both of our insurance companies. Reinsurance serves as the fulcrum of our insurance entities’ ability to absorb multiple catastrophic events in a given year, protecting policyholders and allowing operations to continue smoothly.
“For this renewal, we approached the market with considerably more private market catastrophe capacity demand and the Company executed efficiently with our long-standing reinsurance partners ahead of the upcoming 2024 Atlantic Hurricane Season. We also added new multi-year coverage extending through the 2025-2026 reinsurance period in the process.”
