Reinsurance News

Universal secures highest level of open market cat capacity at reinsurance renewal

1st June 2021 - Author: Luke Gallin

Universal Insurance Holdings, Inc.’s wholly-owned insurance company subsidiaries have completed their 2021-2022 reinsurance programs, which includes the purchase of more open market catastrophe capacity than ever before.

universal-insurance-holdings-logoEffective June 1st, 2021, Universal Property & Casualty Insurance Company (UPCIC) and American Platinum Property and Casualty Insurance Company (APPCIC), have completed their reinsurance programs at a combined, projected cost of roughly 36.4% of estimated direct earned premium for the 12-month treaty period.

According to Universal, this reflects a 5.2% year-over-year increase on the 34.6% figure announced during the previous year.

For UPCIC, this year’s program saw the purchase of more open market cat capacity than at any point in the history of the company, setting the top of its reinsurance tower for a single Florida event to $3.413 billion.

Of this coverage, $1.06 billion has limits that automatically reinstate to guarantee a certain level of protection in multi-event scenarios, explains the carrier.


At the same time, UPCIC has obtained $383 million of cat capacity with contractually agreed limits that extend protection to include both the 2022 and 2023 wind seasons.

Of course, Florida headquartered Universal entered the catastrophe bond market for the first time in March, enabling it to secure multi-year, collateralized reinsurance protection against losses from U.S. named storms for UPCIC and any direct subsidiaries.

This transaction, Cosaint Re Pte. Ltd. (Series 2021-1), provides one limit of $150 million of capacity which may include the 2022 and 2023 wind seasons, depending on loss activity during the current season.

The completed 2021-2022 reinsurance program also saw UPCIC’s first event catastrophe retention for a Florida loss increase by $2 million to $45 million. For a loss involving states other than Florida, UPCIC maintained its first event catastrophe retention at $15 million.

Additionally, UPCIC maintained the same Non-Florida retention following growing Non-Florida exposures by more than 20% over the past 12 months.

Matthew J. Palmieri, President of UPCIC, commented: “On the heels of a very difficult year in 2020 from a catastrophe loss perspective as well as the continued uncertainty from the global Covid 19 pandemic in the first half of 2021, our reinsurance partners have provided us with the comprehensive reinsurance coverage we desire for the 2021 hurricane season.

“2021 marks some significant milestones for UPCIC as it completed its inaugural catastrophe bond transaction, Cosaint Re Pte. Ltd, and also secured more private market reinsurance coverage than at any point in its long tenure as a leading provider of homeowners’ insurance in Florida and other catastrophe prone states. We were able to secure the desired coverage by maintaining our strong historical relationships while expanding our panel with many additional quality counterparties in 2021.

“As expected, our reinsurance costs have increased over the 2020-2021 period for a variety of factors, but with the on-going primary rate increases moving through our portfolio as well as other risk mitigation strategies being implemented, we believe we are set up well to handle the changes.”

The largest private reinsurer participants in Universal’s reinsurance renewal, including Nephila Capital via Allianz Risk Transfer, RenRe, Munich Re, Chubb Tempest Re, Everest Re, and Lloyd’s syndicates, all maintain a rating from S&P of A+ or higher.

Print Friendly, PDF & Email

Recent Reinsurance News

Getting your daily reinsurance news from Reinsurance News is a simple way to receive only the reinsurance industry news that matters, delivered directly to your email inbox.

  • Only email is mandatory, but the more you tell us about yourself the better we can serve you in future!
  • This field is for validation purposes and should be left unchanged.

By submitting the form you are giving your consent to be emailed by us.

Read previous post:
FCA measures to combat loyalty penalties in home, motor markets

The FCA has implemented a package designed to improve competition and protect home and motor insurance customers from loyalty penalties....