Hurricane Ian to cost Florida insurer Universal $1bn gross loss

Florida-headquartered primary insurance carrier Universal Insurance Holdings has projected gross loss of nearly $1 billion from Hurricane Ian that crashed into its home market in late September as a Category 4 major Atlantic hurricane, the deadliest storm to hit Florida since 1935.

To date, the insurer has received approximately 18,000 claims, roughly half the number of Hurricane Irma claims received at this point.

The overall gross ultimate loss of approximately $1 billion is below Universal’s $3 billion reinsurance tower, with projected net exposure limited to retentions at its insurance and captive insurance entity subsidiaries, the company said.

The carrier stated that despite its overall Florida homeowners market share being approximately 7.9% based on the latest Florida residential industry total insured value (TIV) data, market share in Ian’s most intense wind path in the counties of Charlotte, Desoto, Lee and Sarasota is around 3.8%.

Universal’s insurance companies do not provide flood insurance. Its estimated exposure to policies that provide roof and external structural coverage (e.g., landlord and traditional homeowners policies) in those four counties is roughly 2.2%, with the balance of market share in those counties reflecting renters and condo unit owners policies (covering only the interior and contents).

Stephen Donaghy, Universal’s chief executive officer, said: “We’re focused on helping our policyholders rebuild and return to normalcy. Our claims, catastrophe response and customer service teams are on the ground and on the phone, helping our policyholders in their time of need. With our dedicated staff, our disaster preparedness planning and conservative reinsurance program, we’re well prepared for this event and maintain substantial reinsurance protection for any subsequent events.

The insurer has been serving the Florida market since 1998 and has experience across over a dozen hurricanes, including the highly active 2004-2005 seasons as well as recent major catastrophe events, including Hurricanes Irma and Michael in 2017 and 2018, respectively.

“Our strong reinsurance relationships have been formed over many years and we have access to our share of the FLOIR’s RAP layer of reinsurance coverage for the 2023-2024 renewal given that we deferred participation this year, on top of significant multi-year excess of loss catastrophe coverage that is part of next year’s programme,” Donaghy added.

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