Palomar drops aggregate treaty at renewal to top up focus on earthquake

Specialty insurer  Palomar Holdings dropped aggregate reinsurance cover at April 1 renewals while topping up its coverage to handle growth more closely focused on its earthquake business.

In total, Palomar secured roughly $187.5 million of incremental XOL limit from its panel which will incept between April 1, 2023 and June 1, 2023 and provide coverage through June 1, 2024.

Palomar opted to non-renew aggregate XoL cover, in large part on a reduction on the group's continental hurricane exposure.

“While there were compelling coverage offers from existing reinsurers, we will pursue alternative forms of risk transfer that provide protection from multiple severe events,” Palomar chair and CEO Mac Armstrong said.

Expanded XOL in earthquake "further enables the sustained growth of Palomar’s profitable earthquake business," the firm said of what it called an increase in incremental limit.

“The market for our reinsurance was orderly and the pricing was in-line with the expectations that we outlined,” Armstrong said.

“This limit affords us the ability to both grow and optimize our earthquake book of business and execute on our Palomar 2X strategic plan.”

Palomar provides specialty insurance to residential and commercial customers, with a focus on markets it believes are underserved such as earthquake, hurricane and flood insurance.

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