Kingstone increases catastrophe reinsurance cover by 35% to $602.5m at renewal

Property/casualty insurance holding company Kingstone, through its wholly-owned subsidiary Kingstone Insurance Company (KICO), has signed new reinsurance treaties with multiple carriers for the treaty year beginning July 1, 2019.

The new agreements include increased coverage and terms that are consistent with previous treaties.

In terms of catastrophe excess of loss reinsurance (XoL), KICO purchased $602.5 million in coverage from a panel of 53 individual reinsurers, each rated “A- Excellent” or better by AM Best.

Kingstone said the 35 percent increase from the $445 million purchased in the expired term is a result of its growth along with the desire to maintain coverage in excess of that needed to cover a 1 in 250 year event.

The company is now covered for up to a $610 million ground-up loss event, after the $7.5 million direct retention (increased from the prior retention of $5 million).

KICO obtained a low-single digit exposure-adjusted rate change compared to the corresponding premium paid for catastrophe coverage on the expired treaty.

Additionally, it purchased Reinstatement Premium Protection attributable to the 100 year return period which is now $292.5 million of coverage. The treaty provides coverage up to the 1-in-263 year event level.

In terms of the per-risk excess of loss treaties, KICO secured $1,000,000 (increased from $800,000 in the prior term) for maximum net single risk retention on any one loss (pre-tax) for personal lines, and $750,000 for commercial lines.

It also obtained casualty protection up to a $4.5 million single loss, covering the maximum policy limits currently offered by the company.

Meanwhile, the 10 percent personal lines quota share treaty has been discontinued on a run-off basis effective July 1, 2019.

Kingstone has recently announced that it will  no longer underwrite commercial liability risks following a review by its new chief executive Barry Goldstein.

Goldstein, chairman and CEO of Kingstone Companies, said: “This was a challenging year in the reinsurance market, but we are satisfied with the success of our renewal. We were able to secure another substantial increase in coverage limit, in line with our continued growth, and were able to retain all incumbent markets and some additional new markets. Reinsurance markets continue to be more favorable for high quality buyers like Kingstone. We were able to achieve consistent terms at fair and relatively favorable pricing levels compared with other similar buyers.”

He added: “Our strong and diverse panel of 53 reinsurers include many of the most highly-respected and financially stable carriers in the marketplace. The fact that not a single incumbent left our program while we achieved stable pricing levels highlights the strong relationships that Kingstone and its long-term broker Aon have built with our reinsurers.”