Jon Springer, President and Chief Risk Officer (CRO) of Universal Insurance Holdings has indicated that the company plans to maintain its current level of catastrophe retention and increase its reinsurance cover, while at the same time spending less than in prior years.
Speaking during Universal’s Q1 2018 earnings call, Springer also reported that the company has just 32% of its total reinsurance premium budget up for renewal at June 1st.
Universal’s renewals forecast takes into account its multi-year capacity and the coverage it purchased from The Florida Hurricane Catastrophe Fund (FHCF), a tax exempt state trust fund.
Springer explained: “After receiving and evaluating quotes from our lead reinsurers, we entered the market with firm order terms last week on the core all states catastrophe tower for UPCIC (Universal Property & Casualty Insurance Company).”
Whilst Springer declined to talk about specific layers pricing, Sean Downes, Chairman and Chief Executive Officer (CEO) of Universal revealed that the company will benefit from 3.4% average rate increases across Florida.
He also confirmed that Universal’s retention ratio on impacted policies has continued to run over 90% during the first quarter of 2018.
“We are off to a strong start in 2018 and continue to believe that Universal is extremely well positioned going forward,” said Downes. “We remain confident that our multipart organic growth strategy will enable us to deliver profitable premium growth in both Florida and 16 other states.”
He continued: “We have a solid balance sheet with a conservative investment portfolio, minimal debt in an appropriately set loss reserve position, and we’re protected by a comprehensive reinsurance program.
“Our unique, vertically integrated structure positions us well to capitalize in the event of a disruptive industry catastrophe, as was highlighted by our performance during Hurricane Irma.”