United Insurance Holdings Corp. (UPC Insurance) raised its limit by 3.2% for its catastrophe reinsurance programs on June 1.
The multi-event cascading limit was raised to $3.257 billion, adding another $101 million compared to what UPC purchased for 2019-20, Reinsurance News said.
Insurance carriers by catastrophe reinsurance to lower their exposure when a catastrophic event like a hurricane occurs, Investopedia said. By paying part of the premiums the carrier receives from policyholders to the reinsurer, the company shifts some of the risk from policies it underwrites.
The subsidiaries included are United Property & Casualty Insurance Co., Family Security Insurance Co. and American Coastal Insurance Co.
UPC chose 90% for Florida Hurricane Catastrophe Fund (FHCF) Reimbursement Contracts for those subsidiaries. That puts $1.7 billion in the mandatory FHCF layer. The limits and retentions vary for the three companies, Reinsurance News said.
Journey Insurance Co., another UPC subsidiary, had its cascading catastrophe reinsurance limit raised by $5.8 million to $31.9 million.
UPC also bought stand-alone catastrophe reinsurance for two companies. The limit per occurrence for Blueline Cayman Holdings is $111 million and Interboro Insurance Co. was set at $57 million. In the aggregate amounts were $222 million for Blueline and $79 million for Interboro.
UPC Re, the group’s reinsurance subsidiary, anticipates a more than 40% return in a $12.5 million co-participation in the core catastrophe reinsurance program’s lowest layer, Reinsurance News said. The company will get $7.3 million of the premium for that assumed limit. That co-participation is par of its pre-tax retention of $96.3 million.
UPC’s catastrophe excess of loss reinsurance programs increased its multi-year limit by $55 million from the $350 million that was secured before 2020/21.
