Common Insurance coverage Holdings, Inc. has bought first-event disaster reinsurance protection of as much as $2.4 billion, down from the earlier 12 months’s simply over $2.8 billion, citing no materials adjustments to reinsurance companions and ILS supervisor Nephila Capital once more named as a big marketplace for the corporate.
For its subsidiary corporations Common Property & Casualty Insurance coverage Firm (UPCIC) and American Platinum Property and Casualty Insurance coverage Firm (APCIC), Common has set the highest of its mixed reinsurance tower for a single All States (together with Florida) occasion at $2.404 billion for the 2024 to 2025 12 months.
A 12 months in the past, that was set at $2.831 billion, which was additionally down from over $3.1 billion of reinsurance wanted within the earlier 12 months.
Whereas Common’s enterprise has fluctuated in measurement considerably, there are different issues just like the adjustments to state-backed reinsurance layers resembling Florida’s RAP and FORA to think about within the combine, all of which drove resulted in Common’s “demand for personal market capability rising considerably,” the insurer defined.
UPCIC’s in pressure wind-covered coverage rely in Florida declined by 25,266 as much as the top of March, which drove a 12 months over 12 months discount to the highest finish of its first occasion reinsurance tower, the corporate mentioned.
Notably for our readers, Common opted to resume an expiring $150 million of disaster bond protection (the Cosaint deal) within the conventional reinsurance market this 12 months, marking a departure in technique versus many different Floridians which have purchased extra cat bond cowl in 2024.
Common famous that its greatest reinsurance suppliers in 2024 have been Nephila Capital, Markel, RenaissanceRe, Munich Re, Chubb Tempest Re, Ariel Re, Everest Re and Lloyd’s of London syndicates, so it’s clear ILS capital stays a serious element of the tower total.
“We’re happy to announce the completion of the 2024-2025 reinsurance program for each of our insurance coverage firms,” defined Matthew J. Palmieri, Chief Threat Officer. “Reinsurance serves because the fulcrum of our insurance coverage entities’ potential to soak up a number of catastrophic occasions in a given 12 months, defending policyholders and permitting operations to proceed easily. For this renewal, we approached the market with significantly extra non-public market disaster capability demand and the Firm executed effectively with our long-standing reinsurance companions forward of the upcoming 2024 Atlantic Hurricane Season. We additionally added new multi-year protection extending by way of the 2025-2026 reinsurance interval within the course of.”
Common additionally famous that $1.023 billion of its reinsurance tower will routinely reinstate to supply some multi-event safety, which is up by $177 million in mixture restrict that’s obtainable for subsequent occasions in comparison with a 12 months earlier.
$240 million of disaster reinsurance offers multi-year protection into the 2025-2026 treaty 12 months, $165 million under the Florida Hurricane Disaster Fund and $75 million above it.
The mixed first occasion retention for a loss in all states together with Florida is unchanged from the prior 12 months at $45 million.
Common mentioned that the whole value of its 2024-2025 disaster reinsurance program for UPCIC and APPCIC is projected to be round 33% of estimated direct premiums earned for the 12-month treaty interval, up from an estimated 31.8% a 12 months earlier.
That doubtless displays the elevated non-public market reinsurance restrict wanted in 2024, however the participation of third-party capital throughout its reinsurance panel may have helped in making certain capital effectivity at this renewal.
Universal had already secured this renewal back before May began, as the corporate acquired into the market early once more this 12 months.
Read all of our reinsurance renewals news and analysis.
