Assurant expands 2019 property cat reinsurance programme, lowers retention by $40m
US-based insurer Assurant has expanded its reinsurance protection, while lowering its per-event retention from $120 million in 2018 to $80 million, as it looks to reduce its catastrophe exposure and boost earnings in 2019.
Assurant has finalised its 2019 property catastrophe reinsurance programme that it said will protect more than 3 million homeowners and renters policyholders against severe weather and other hazards. The coverage was placed with more than 45 reinsurers rated A- or better by AM Best.
The US programme provides $1.16 billion of coverage in excess of a $80 million retention per-event with a projected probable maximum loss (PML) of approximately a 1-in-173-year storm, based on projected modelled loss estimates. When combined with the Florida Hurricane Catastrophe Fund, the programme is covered for gross Florida losses of up to $1.4 billion.
Multiyear reinsurance contracts cover approximately 35 percent of reinsurance layers.
All layers of the programme allow for one automatic reinstatement, except Layer 1 which has two reinstatements, and that provides multi-event protection in which higher coverage layers drop down to $120 million as the lower layers and reinstatement limit are exhausted.
2019 reinsurance premiums for the programme are estimated to be approximately $165 million pre-tax reflecting the significant decrease in catastrophe per-event retention and modest growth in exposure.
Ass
“We are pleased to complete our 2019 catastrophe reinsurance program, which this year includes a significant reduction of our per-event retention to $80 million, as we look to lower our catastrophe exposure and produce more predictable earnings and cash flow,” said Alan Colberg, president and chief executive officer of Assurant.
“At Assurant, we manage risk to protect and support our policyholders when catastrophes occur. Going forward, we will continue to evaluate options to further reduce our catastrophe exposure,” Colberg added.
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