Palomar ups limit, trims retentions, adds ILS for 6.1 renewal
California-based specialty and property cat re/insurer Palomar Holdings secured $3.06 billion in reinsurance coverage for its key earthquake tower at the mid-year treaty renewals, a $400 million increase over year-prior.
“"We renewed our reinsurance program at terms and pricing that were better than our initial expectations and reduced our hurricane event retention,” CEO Mac Armstrong said.
As a result, Palomar upped its full year 2024 target for adjusted net income by neighbourhood $10 million to a range of $122 - 128 million.
Palomar’s reinsurance coverage now extends to $3.06 billion for earthquake events, $735 million for Hawaii hurricane events, and $117.5 million for all continental US hurricane events.
“The reinsurance program provides ample capacity for the Company’s growth in the subject business lines as well as coverage to a level exceeding Palomar’s 1:250-year peak zone Probable Maximum Loss,” management said.
Palomar cut its per event hurricane retention moderately to $15.5million and has the earthquake tower start at $20 million, all “meaningfully within” prior management vow to hold to under one quarter’s adjusted net income and less than 5% of after-tax surplus.
ILS came in heavy in the earthquake tower on $420 million of new cat bond cover via Torrey Pines Re Series 2024-1, Palomoar's fifth ILS deal to date, and with $895 million of multi-year ILS capacity still on hand.
All told, Palomar claims a panel of 90 reinsurers and ILS investors, including multiple new entrants either sporting an ‘A-‘ rating or better or with full collateral down on the deals.
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
