Universal to pass hurricane Michael loss to reinsurers
Florida-based Universal Insurance Holdings is passing the expected $300-350 million gross losses and loss adjustment expenses from hurricane Michael almost entirely to its reinsurance panel.
Despite the up to $350 million losses, Universal expects the hurricane to result in net pre-tax losses and loss adjustment expenses of only $35 million.
To the extent the company experiences any additional reinsurance recoveries from its supplemental non-Florida reinsurance programme, those recoveries could serve to partially reduce its $35 million retention.
Hurricane Michael initially made landfall as a strong Category 4 hurricane along the Florida Panhandle on Oct. 10, 2018, primarily impacting Florida, Georgia, and several other Southeastern US states.
In addition, Universal expects gross and net pre-tax losses and loss adjustment expenses of $2.5 million from tropical Storm Gordon which initially made landfall on the US Gulf Coast on Sept. 4, 2018, primarily impacting Florida, Alabama, Louisiana, and Mississippi.
Furthermore, Hurricane Florence which initially made landfall as a strong Category 1 hurricane in North Carolina on Sept. 14, 2018, is expected to produce gross losses and loss adjustment expenses of $35-45 million, resulting in net pre-tax losses and loss adjustment expenses of $5 million.
“We are thankful that our dedicated staff, disaster preparedness planning and conservative reinsurance programme placed with strong reinsurance partners helped to limit the overall financial impact of these events,” said Universal CEO Sean Downes.
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