Travelers adds new personal insurance hurricane XoL treaty at mid-year

US insurer  Travelers added a $500 million personal insurance hurricane catastrophe XoL treaty to its array of mid-year reinsurance deals and added limit to its other key treaty.

The new personal insurance XoL treaty covers 50% of single event losses between $1.75 and $2.75 billion on hurricane and tropical storm homeowners policy damages for the US east and gulf coast ex-Florida.

The group's northeast property catastrophe XoL reinsurance treaty was upped by $100 million in limit to $850 million with retentions upped from $2.25 billion to $2.5 billion. Remaining terms appeared similar.

Coverage from the cat bond market remains as it was after a $575 million May 2022 placement, save for the annual adjustment to attachment points, up from $2.2 billion to $2.48 billion.

Middle market earthquake cat XoL, Canadian property cat XoL, corporate cat XoL and personal insurance earthquake cat XoL were listed as remaining in place, albeit without details. Reference to an 'Underlying Property Aggregate Catastrophe Excess-of-Loss Reinsurance Treaty' were removed from the current-year line-up.

The extra purchase comes amid a rough run of nat cats hitting Travelers earnings in 2023.

Nat cat losses delivered a $1.48 billion pre-tax hit to The Travelers to push the group to a fractional net loss and a 106.5% combined ratio in Q2. Travelers had already been in trouble with nat cats in the first quarter, facing down a pre-tax bill of $535 million net of reinsurance to put core earnings below prior year levels.

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.