Insurance companies need to purchase catastrophe reinsurance to cover extreme losses caused by events such as hurricanes. | By NOAA/Wikimedia Commons
Heritage Insurance Holdings Inc. committed $272.1 million for its catastrophe reinsurance program, an increase of 6% from 2019-2020.
The total cost to Heritage in the program for its statutory insurance subsidiaries, Zephyr Insurance Co., Narragansett Bay Insurance Co. and Heritage Property Casualty Insurance Co. accounted for 28.4% of March 31, 2020 premiums-in-force, Heritage Insurance reported.
“We were able to place our 2020-2021 catastrophe reinsurance program on reasonable terms in a challenging renewal year, which is a testament to our multi-state diversification, Florida de-risking, prudent reserving and long-standing relationships with our reinsurance partners,” Bruce Lucas, Heritage’s chairman and CEO, said, the property and casualty insurance holding company reported.
The insurance holding company’s 90% participation in the Florida Hurricane Catastrophe Fund matches last year.
Other cat reinsurance program points include a $1.347 billion fist event reinsurance tower exhaustion point in the southeast. A $2.382 billion total limit in the southeast is created through automatic reinstatement of private market layers, Heritage Insurance reported. Co-participations and loss retentions remain inclusive for both.
The southeast and Hawaii have higher first event loss retention, set at $20 million, Heritage Insurance reported. Additional co-participation begins when surpassing $945.4 million. For the northeast, $13.3 million was set as first event loss retention and additional co-participation designated above $390 million.
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