Universal’s Insurance Subsidiaries Complete 2022-2023 Reinsurance Programs
01 June 2022 - 6:15AM
Business Wire
- Successfully secured more open market catastrophe capacity
across all treaties and multiple events than at any point in the
history of the Company.
- The largest private reinsurance participants all maintain a
rating from S&P Global of A+ or higher (Nephila Capital,
RenaissanceRe, Munich Re, Chubb Tempest Re, Everest Re and Lloyd’s
of London syndicates).
- There is no co-participation above the Company’s consolidated
retention and there are no gaps in coverage for hurricanes and
tropical storms.
- Total cost of the 2022-2023 reinsurance program for UPCIC and
APPCIC is projected to be $696 million, reflecting approximately
37.6% of estimated direct premiums earned for the 12-month treaty
period, compared to approximately 36.4% of estimated premiums at
this time last year.
- Similar to prior years, premiums will continue to be ceded in
quarterly installments with no accelerated deposit premiums.
Universal Insurance Holdings, Inc. (NYSE: UVE)(“Universal” or
the “Company”) today announced the completion by Universal Property
& Casualty Insurance Company (“UPCIC”) and American Platinum
Property and Casualty Insurance Company (“APPCIC”), the Company’s
wholly-owned insurance company subsidiaries, of their 2022-2023
reinsurance programs, effective June 1, 2022.
“We are pleased to announce the completion and outcome of the
2022-2023 reinsurance programs for both of our insurance
companies,” said Matthew J. Palmieri, President of UPCIC. “Against
a backdrop of wide ranging macro-economic pressures globally and an
extremely challenging property insurance and reinsurance
marketplace, particularly in the markets that we serve, we were
able to secure the extensive reinsurance program we desired for the
2022 hurricane season. In fact, we were able to secure more
capacity in future years, including the 2024 renewal. We appreciate
our long-standing partners that have supported us for over a decade
and we look forward to continuing to foster these specific key
relationships as well as the new ones we established in this
renewal cycle. As expected, our reinsurance costs have increased
modestly over the 2021-2022 period, but remain in line with our
expectations and give us the operational stability and coverage
certainty we need to execute our plan well into the future.”
Universal’s Florida policies-in-force declined by 7%
year-over-year as of first quarter 2022, while Florida
premiums-in-force increased by 11%, as the Company continues to
optimize its spread of risk and improve rate adequacy. UPCIC’s
first event reinsurance tower has a top end of $3.16 billion, down
7% from last year, in line with the decline in Florida
policies-in-force. Inclusive of subsequent event coverage, UPCIC
purchased more open market capacity across all treaties for its
expected risk count than ever before. UPCIC’s first event tower has
$1.14 billion of limit that automatically reinstates to guarantee a
certain level of protection in multi-event scenarios, including
reinstatement premium protection for all private layers below the
FHCF. UPCIC’s all states retentions remain unchanged at $45 million
for first and second events and $25 million for third and fourth
events. For a first event only, Universal Insurance Holdings (UIH)
provides UPCIC with layer one coverage, utilizing the same captive
as the 2021-2022 treaty period.
To insulate future years, UPCIC has secured $383 million of
multi-year catastrophe capacity below the Florida Hurricane
Catastrophe Fund, with contractually agreed limits that extend
coverage through the 2023 wind season, $277M of which extends
through the 2024 wind season. UPCIC’s catastrophe bond, Cosaint Re
Pte. Ltd, secured during the 2021-2022 renewal, continues to
provide one limit of $150 million in this year’s program and it may
also include the 2023 wind season, depending on loss activity this
year.
APPCIC’s first event catastrophe retention for a Florida loss is
$3.5 million on a consolidated basis, with a first event tower
exhaustion point of $54.6 million. Similar to UPCIC, there are no
co-participations in any layers and no accelerated deposit premium
requirements.
About Universal Insurance Holdings, Inc.
Universal Insurance Holdings, Inc. (NYSE: UVE) is a holding
company offering property and casualty insurance and value-added
insurance services. We develop, market, and write insurance
products for consumers predominantly in the personal residential
homeowners lines of business and perform substantially all other
insurance-related services for our primary insurance entities,
including risk management, claims management and distribution. We
sell insurance products through both our appointed independent
agents and through our direct online distribution channels in the
United States across 19 states (primarily Florida). Learn more at
UniversalInsuranceHoldings.com.
Forward-Looking Statements
This press release may contain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. The words “believe,” “expect,” “anticipate,” “will,”
“plan,” and similar expressions identify forward-looking
statements, which speak only as of the date the statement was made.
Such statements may include commentary on plans, products and lines
of business, marketing arrangements, reinsurance programs and other
business developments and assumptions relating to the foregoing.
Forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified,
including those risks and uncertainties described under the heading
“Risk Factors” and “Liquidity and Capital Resources” in our 2021
Annual Report on Form 10-K, and supplemented in our subsequent
Quarterly Reports on Form 10-Q. Future results could differ
materially from those described, and the Company disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events,
or otherwise. For further information regarding risk factors that
could affect the Company’s operations and future results, refer to
the Company’s reports filed with the Securities and Exchange
Commission, including the Company’s Annual Report on Form 10-K and
the most recent quarterly reports on Form 10-Q.
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version on businesswire.com: https://www.businesswire.com/news/home/20220531005976/en/
Arash Soleimani, CFA, CPA Chief Strategy Officer 954-804-8874
asoleimani@universalproperty.com
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