State Auto chooses aggregate cat reinsurance
Property and casualty insurer State Auto has swapped its quota share reinsurance agreement for a one year property aggregate excess catastrophe reinsurance agreement.
At the January renewals, State Auto entered into the agreement with a syndicate of reinsurers covering property business underwritten by its personal insurance and business insurance segments, including automobile physical damage.
The new agreement provides reinsurance coverage of $75 million during 2015 for PCS numbered catastrophes after the retention of $165 million of losses by State Auto.
Individual occurrences are not subject to an occurrence deductible, but are subject to a maximum amount of $55 million consistent with the group’s retention under its existing property catastrophe excess of loss reinsurance agreement. The agreement excludes property risks underwritten by the specialty insurance segment.
Under the quota share reinsurance agreement, which terminated in accordance with its terms on December 31, 2014, State Auto ceded to reinsurers 75 percent of its homeowner business during the term of the agreement.
As a result of the termination of the quota share reinsurance agreement, approximately $89 million of unearned premiums and $63 million of cash will be returned to State Auto.
