Hannover Re, Everest Re, Munich Re back National General Holdings

Personal lines insurer National General Holdings has entered into separate two-year quota share reinsurance agreements covering its auto and homeowners lines of business with a group of what it called highly rated third-party reinsurance providers.

Barry Karfunkel, the chief executive of National General, said: "We are excited to partner with such a high quality group of reinsurers to support the growth we are experiencing in our auto and homeowners lines of business. It is rewarding to see the value that our reinsurance partners place on the business that we have built and on our underwriting sophistication.

The new quota share agreements give us the capital flexibility to take advantage of the unprecedented opportunity we are experiencing in two of our key product lines.”

The quota share on its auto book will see the company cede 15 percent of net liability under auto policies in force and new and renewal policies issued during the term of the agreement to Hannover Re. The company will receive a 31.2 percent provisional ceding commission on premiums ceded to the reinsurers during the term of the agreement, subject to a sliding scale adjustment to a maximum of 32.8 percent if the loss ratio for the reinsured business is 63.4 percent or less and a minimum of 29.6 percent if the loss ratio is 66.6 percent or higher.

The liability of the reinsurer is capped at $5 million per risk or $70 million per event. The cession may be increased, under certain conditions, up to a maximum cession of 20 percent.

The quota share on its homeowners business will see the company cede 29.6 percent of net liability under homeowners policies, including lender placed property policies, in force at the effective date and new and renewal policies issued during the term of the agreement to a panel of reinsurers led by Everest Re and Munich Re.

Under the agreement, the company receives a 42.5 percent ceding commission on premiums ceded to the reinsurers during the term of the agreement. The liability of the reinsurers is capped at $5 million per risk or $70 per event.

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