Heritage Insurance Holdings, a leading property and casualty insurance holding company, has announced the successful completion of its 2024-2025 catastrophe excess of loss reinsurance program. The program, which provides essential coverage for Heritage’s insurance subsidiaries, includes Heritage Property Casualty Insurance Company, Narragansett Bay Insurance Company, and Zephyr Insurance Company.
CEO Ernie Garateix expressed his delight in completing the reinsurance program, highlighting the company’s commitment to providing adequate coverage for the markets it serves. Garateix also emphasized the value of the support from both long-term reinsurance partners and new partners, ultimately contributing to the program’s success.
The key points of the 2024-2025 catastrophe reinsurance program are as follows:
1. Cost: The program has a total consolidated cost of approximately $422.3 million.
2. Replacement of Prior Program: The current program cost includes replacing the previous year’s program, which included over $70.0 million of limit provided through the Florida Reinsurance to Assist Policyholders (“RAP”) program at no cost to the Company.
3. Reinsurance Tower Exhaustion Points: External reinsurance partners have set first event reinsurance tower exhaustion points at $1.1 billion for the Northeast, $1.3 billion in the Southeast, and $750.0 million in Hawaii. These limits can be supplemented through affiliate Osprey Re.
4. Catastrophe Bonds: The program includes a Southeast-only limit of $100.0 million through catastrophe bonds issued by Citrus Re Ltd. This addition complements existing Citrus Re catastrophe bonds and provides substantial coverage for potential losses.
5. Loss Retention: The loss retention for the Company is approximately $40.0 million for the Southeast and Hawaii, and $32 million for the Northeast.
6. Florida Hurricane Catastrophe Fund: The Company’s participation in the Florida Hurricane Catastrophe Fund remains consistent at 90.0% of the program.
It’s crucial to note that the entire program is indemnity based, providing a comprehensive and reliable approach to property and casualty insurance.
Heritage Insurance Holdings is a well-established super-regional insurance holding company that offers a wide range of personal and commercial residential insurance solutions. With a comprehensive network of experienced agents, the company writes approximately $1.4 billion of gross premiums across multiple states.
Overall, Heritage’s successful completion of its reinsurance program demonstrates its commitment to safeguarding properties and providing peace of mind to its policyholders. By partnering with reputable reinsurance companies, Heritage Insurance Holdings reinforces its ability to navigate potential risks and ensure adequate coverage for its customers.
In addition to the information provided in the article, here are some facts, current market trends, forecasts, and key challenges associated with Heritage Insurance Holdings’ reinsurance program:
1. Market Trends: One current market trend in the property and casualty insurance industry is the increasing frequency and severity of natural disasters, such as hurricanes and wildfires. This trend has led insurance companies like Heritage Insurance Holdings to strengthen their reinsurance programs to mitigate potential losses.
2. Forecast: Due to climate change and other factors, the frequency and severity of natural disasters are expected to continue rising in the coming years. This means that the demand for comprehensive reinsurance coverage, like the one offered by Heritage Insurance Holdings, will likely increase.
3. Key Challenges: One key challenge associated with reinsurance programs is accurately assessing the potential risks and losses that may occur in the future. Insurance companies need to perform thorough risk modeling and analysis to determine the appropriate levels of coverage and pricing for their reinsurance programs.
Advantages of Heritage Insurance Holdings’ reinsurance program:
– Comprehensive Coverage: The reinsurance program provides essential coverage for Heritage’s insurance subsidiaries, ensuring that they are well-equipped to handle potential losses from catastrophic events.
– Reputable Reinsurance Partners: Heritage Insurance Holdings has partnerships with both long-term reinsurance partners and new partners, which adds to the strength and reliability of their reinsurance program.
– Indemnity-based Approach: The entire program is indemnity-based, meaning that it provides a comprehensive and reliable approach to property and casualty insurance. This approach ensures that policyholders will be fairly compensated for their losses.
Disadvantages:
– Cost: The program has a total consolidated cost of approximately $422.3 million, which can be a significant expense for Heritage Insurance Holdings.
It is important for Heritage Insurance Holdings to continuously evaluate and adjust their reinsurance program to address evolving market trends, forecasted risks, and any challenges that may arise. This will help the company maintain adequate coverage for its customers and stay competitive in the property and casualty insurance market.
For more information on Heritage Insurance Holdings and their reinsurance program, you can visit their official website: Heritage Insurance Holdings