Federal National agrees to 2018-2019 reinsurance programme
Federated National Holding Company has finalised its excess of loss catastrophe reinsurance programme for 2018-2019.
The programme will provide Federated National and its wholly-owned insurance subsidiaries, Federated National Insurance Company (FNIC) and Monarch National Insurance Company (MNIC), approximately $1.34 billion of reinsurance coverage in excess of $23 million retention for catastrophic losses, at an approximate total cost $153 million.
The cost of the programme represents a saving of approximately $27 million from the final costs of the 2017-2018 reinsurance programmes.
This saving is reflected in a 5.8 point decrease in the ceded premium to gross written premium ratio from 33.9 percent for the 2017-2918 reinsurance programme to projected 28.1 percent for the 2018-2019 reinsurance programme.
Federated National said its recent acquisition of the minority interests of MNIC, and the subsequent combination of both FNIC and MNIC under a single programme has allowed it to capitalise on efficiency and scale.
Of the combined 2018-2019 reinsurance programmes, $103.2 million is allocated for the private reinsurance for Federated National’s Florida exposure, including prepaid automatic premium reinstatement protection, along with approximately $47.2 million payable to the Florida Hurricane Catastrophe Fund.
Federated National said the combination of private and FHCF reinsurance treaties will afford FNIC and MNIC approximately $1.81 billion of aggregate coverage with a maximum single event coverage totalling approximately $1.34 billion, exclusive of retentions.
FNIC’s non-florida excess of loss reinsurance treaties afford Federated National an additional $23 million of aggregate coverage, with $5 million first event coverage and $18 million second event coverage - with the incremental $13 million of second event coverage applying to hurricane losses only.
Overall, there is a non-Florida retention of $15 million for the first event and $2 million for the second event, through retentions are reduced to $7.5 million and $1 million after taking into account the profit sharing agreement that FNIC has with the nonaffiliated managing general underwriter that writes our non-Florida property business. The cost of FNIC’s non-Florida reinsurance programme will be approximately $2.6 million for private reinsurance, including prepaid automatic premium reinstatement protection.
Make sure you are GDPR compliant and confirm your email address to keep getting our daily emails
More of today's news
SCOR is first reinsurer to sponsor UK cat bond
AXIS Re unveils strategic overhaul, market expansion plans
2017 costliest year on record for UK specialty market: EY
The Hanover hires alternative markets unit leader from Zurich
Nippon Life acquires 85.1% stake in MassMutual Japan
The Hartford completes Talcott sale
Chubb appoints new energy practice leaders
Wilmington Trust adds to insurance collateral solutions team
