Heritage Insurance Holdings, Inc., a property and casualty insurance holding company, announced that its insurance subsidiaries, Heritage Property & Casualty Insurance Co. and Zephyr Insurance Co., have completed the placement of their 2017-2018 reinsurance programs. The programs are incorporated into one reinsurance structure and are allocated amongst traditional reinsurance, collateralized reinsurance, catastrophe bonds issued by Citrus Re and coverage by the Florida Hurricane Catastrophe Fund (FHCF).
According to a statement by the company, the new program provides first event reinsurance protection for catastrophic losses of up to $1.75 billion in Florida and up to $731 million in Hawaii, with multiple event coverage up to $2.62 billion. Heritage said the amount exceeds the requirements established by the company’s rating agency, Demotech, Inc., the Florida Office of Insurance Regulation and the Hawaii Insurance Division.
Bruce Lucas, Chairman and CEO of Heritage, said the 2017 reinsurance treaty is a “significant improvement over the 2016 treaty,” adding that catastrophe reinsurance costs were reduced by over $20 million, or 8.3 percent, while treaty terms and conditions were improved. The first event retention was reduced from $40 million to $20 million and our ground up retention for second event coverage is $16 million.
“We continue to minimize our reliance on state government sponsored reinsurance and maintained our participation in the FHCF at 45 percent. Our new program was placed on a cascading basis which provides greater horizontal protection in a multiple small events scenario and features additional coverage enhancements,” Lucas said. “In addition, Heritage expanded its use of multi-year, fully collateralized catastrophe bonds and has $687.5 million in catastrophe bond coverage today.”
Heritage’s estimated net cost for the 2017-2018 catastrophe reinsurance program is approximately $223 million. The total estimated cost for per risk and facultative coverage is projected to be an additional $7 million. The primary factors causing the decrease from last year are the proactive exposure management executed by Heritage over the past 12 months coupled with significantly improved pricing.
Heritage Insurance Holdings, Inc. is a property and casualty insurance holding company headquartered in Clearwater, Fla. Its subsidiaries, Heritage Property & Casualty Insurance Company and Zephyr Insurance Company, write approximately $565 million and $58 million, respectively, of personal and commercial residential premium through a large network of experienced agents. Heritage currently writes property and casualty insurance policies in Florida, Hawaii, North Carolina, South Carolina and Georgia.
Topics Florida Catastrophe Reinsurance Property Hawaii Property Casualty Casualty
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