Universal Insurance Holdings, the publicly traded parent of one of Florida’s largest property insurers, said it has completed its reinsurance program for its two subsidiaries ahead of the June 1 renewal.
“For this renewal, we approached the market with considerably more private market catastrophe capacity demand and the company executed efficiently with our long-standing reinsurance partners,” Universal’s chief risk officer, Matthew Palmieri, said in a statement posted Friday.
Universal Holdings includes Universal Property & Casualty Insurance Co. and American Platinum Property & Casualty, both based in Fort Lauderdale. The firms were able to shave costs on reinsurance by shedding more than 25,200 policies in Florida over the past year, the holding company said. The insurers’ held 820,000 policies in force at the end of the first quarter 2024, a significant drop from two years ago.
“UPCIC and APPCIC set the top of their combined reinsurance tower for a single all-states (including Florida) event to $2.404 billion,” a Universal news release explained.
About $1 billion of that coverage has limits that automatically reinstate to guarantee a certain level of protection in multi-event scenarios, an increase of $177 million in aggregate limit available for subsequent events over the 2023-2024 period.
Other highlights from the renewal:
- The total cost of the 2024-2025 reinsurance program was about one-third of the estimated direct earned premium for the 12-month treaty period, up from 31.8% at this time last year. Universal suggested the cost could have been higher due to its demand for more private market capacity this time.
- The largest private reinsurance participants all maintain a rating from the AM Best financial rating firm of ‘A’ or higher. These include Nephila Capital, Markel, RenaissanceRe, Munich Re, Chubb Tempest Re, Ariel Re, Everest Re and Lloyd’s of London syndicates, Universal said in its statement.
The insurance companies also secured $240 million of catastrophe capacity extending through the 2025-2026 treaty year. Some $165 million of the capacity sits below the Florida Hurricane Catastrophe Fund and $75 million sits above the Florida Hurricane Catastrophe Fund, Universal said. The Universal insurers’ combined $45 million all-states (including Florida) first event retention loss is unchanged from the prior year.
Reinsurance authorities have said that, unlike the previous three years that saw spiking costs and limits on coverage, reinsurance renewals this year have proceeded more smoothly for most Florida carriers. Reinsurers have been comforted by Florida legislative changes that appear to have reduced claims litigation significantly in the past 18 months, officials said at a recent AM Best webinar.
Topics Florida Reinsurance
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