Assurant completes $1.3bn P&C reinsurance programme
New York-based Assurant has finalised a $1.3 billion 2018 property catastrophe reinsurance programme reducing the company’s financial exposure and protecting 2.9 million homeowners and renters policyholders against severe weather and other hazards.
The 2018 reinsurance premiums for this program are estimated to be $121 million compared to $126 million in 2017. This reduction is mainly driven by Assurant’s declining catastrophe exposure within its lender-placed insurance offering, the company noted. Coverage was placed with more than 40 reinsurers that are all rated A- or better by AM Best.
“In 2017, our catastrophe reinsurance programme proved strong and resilient, absorbing over $600 million in total gross losses, and more importantly Assurant was able to support policyholders during their time of need,” said Michael Campbell, president, Assurant Global Home.
“This year, we’ve secured comprehensive catastrophe coverage with attractive terms and conditions due to our risk management expertise and strong relationships with our reinsurance partners,” Campbell added.
“Assurant is not only dedicated to providing protection to our policyholders but also to our shareholders, as we gradually reduce our overall net loss retention, in conjunction with our declining exposure, over time.”
The US per-occurrence catastrophe coverage includes a main reinsurance programme providing $985 million of coverage in excess of a $120 million retention. The main US tower protects the company’s projected probable maximum loss (PML) for approximately a 1 in 170-year storm. As a result, the probability of exceeding the top of the programme in one year is less than 1 percent.
The US programme also includes multiyear reinsurance contracts covering 32 percent of the $855 million layers in excess of $240 million.
A Florida Hurricane Catastrophe Fund offers coverage for losses up to 90 percent of $283 million in excess of a $88 million retention. In the event of a Florida hurricane, this coverage will be utilized prior to the main US reinsurance programme. After applying coverage, any remaining losses would then be eligible for recovery within the main tower. The programme is covered for gross Florida losses of up to $1.4 billion which is approximately a 1-250-year Florida event based on projected modelled loss estimates. Utilizing both the coverage from the US tower and the Florida Hurricane Catastrophe Fund, the maximum retention for a Florida event would be $120 million.
Assurant increased its international per-occurrence catastrophe coverage as the group continues to expand its business in select property markets. The international programme includes Caribbean protection of up to $162.5 million in excess of a $17.5 million retention, and Latin America protection of up to $183.5 million in excess of a $4.5 million retention which is an extension of 2017’s protection that will renew on September 1, 2018. In these regions, Assurant’s product offerings are primarily residential dwelling policies covering the structure and contents.
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