Heritage Insurance Holdings, Inc. has now finalised its disaster excess-of-loss reinsurance renewal for the approaching 12 months and the highest of its reinsurance tower stretches to $1.3 billion, with elevated safety for the southeast US, whereas shrinking protection for the northeast US and Hawaii.
For 2024, the Heritage reinsurance program supplies protection as much as $1.3 billion of losses for the southeast United States, $1.1 billion for the northeast and $750 million for Hawaii.
That compares to a 2023 reinsurance renewal that offered $1.3 billion for the Northeast, $1.1 billion for the Southeast and $870 million in Hawaii.
The all indemnity primarily based, disaster excess-of-loss reinsurance program for 2024, covers subsidiaries Heritage Property Casualty Insurance Company, Narragansett Bay Insurance Company and Zephyr Insurance Company for the 12 months to finish of May 2025.
This 12 months, Heritage has extra in-force disaster bond cowl that assists it via the multi-year safety and phrases they provide.
That mentioned, the full consolidated cost of the Heritage reinsurance program for 2024 is reported to be barely increased year-on-year at $422.3 million, in comparison with the $420.5 million paid a 12 months earlier.
But, it’s notable that one change to the tower was that Heritage changed a $70 million chunk of reinsurance that got here from the Florida Reinsurance to Assist Policyholders (RAP) program in 2023, with non-public market protection in 2024. So the slight enhance in cost is probably decrease than might need been anticipated with that in thoughts.
“We are delighted to announce the successful completion of our 2024-2025 catastrophe excess of loss reinsurance program,” defined Heritage CEO Ernie Garateix. “We worth the unwavering help of our valued long-term reinsurance companions in addition to new reinsurance companions and reaffirm our dedication to supply acceptable protection for the markets we serve.
“I’m pleased to continue to place a portion of our program through capital markets using catastrophe bonds issued by Citrus Re, which provides multi-year reinsurance coverage.”
Heritage has $435 million of excellent disaster bond backed reinsurance, which supplies multi-year, layered safety and so assists the corporate in the case of renewals, given the understanding on value and protection phrases that gives.
Heritage most not too long ago added $100 million of named storm reinsurance for southeast states via a Citrus Re Ltd. (Series 2024-1) transaction issued in March 2024.
The provider additionally has $120 million of northeast solely named storm reinsurance restrict and a shared $115 million of northeast and Hawaii named storm restrict via its May 2023 issuance Citrus Re Ltd. (Series 2023-1).
In addition, $100 million of northeast solely reinsurance from the Citrus Re Ltd. (Series 2022-1) cat bond can also be available for the approaching hurricane season.
The retention on the Heritage reinsurance program is roughly $40 million for the southeast and Hawaii and $32 million for the northeast for 2024, with the northeast up barely from the $30 million retention it had a 12 months in the past.
Once once more, Heritage can use its captive reinsurance car Osprey Re to buy-down the retention and develop this system protection as effectively.
In phrases of the state backed reinsurance, Heritage opted for a 90% Florida Hurricane Catastrophe Fund participation, which was per the prior 12 months.
As Heritage continues on its enlargement plan, to change into an more and more super-regional property and casualty insurance coverage provider, it’s encouraging to see the corporate persevering with to place the disaster bond market on the coronary heart of its reinsurance preparations and we must always count on extra cat bonds to be sponsored subsequent 12 months, significantly with its 2022 issuance set to mature previous to the 2025 hurricane season.
You can examine each disaster bond Heritage has ever sponsored within the Artemis Deal Directory, the place you possibly can filter the listing by sponsor.
