Universal Insurance Holdings, Inc. Insurance Subsidiaries Complete 2020-2021 Reinsurance Programs
- Successfully secured more open market catastrophe capacity than
at any point in the history of the Company.
- Top level of UPCIC reinsurance tower provides coverage to the
1-in-300 year level.(1)
- Total cost of the 2020-2021 reinsurance program for UPCIC and
APPCIC projected to be approximately 34.6% of estimated direct
earned premium for the 12-month treaty period (in-line with
previous guidance expectations) compared to 33.3% at this time last
year reflecting a 4.1% year-over-year increase.
- The largest private reinsurance participants all maintain a
rating from S&P Global of A+ or higher (Nephila Capital via
Allianz Risk Transfer, RenaissanceRe, Munich Re, Arch Re, Chubb
Tempest Re and Lloyd’s of London syndicates).
(1) Using RMS modeling estimates as of 3/31/20.
Universal Insurance Holdings, Inc. (NYSE: UVE) today announced
the completion by Universal Property & Casualty Insurance
Company (“UPCIC”) and American Platinum Property and Casualty
Insurance Company (“APPCIC”), the Company’s wholly-owned insurance
company subsidiaries, of their 2020-2021 reinsurance programs,
effective June 1, 2020.
“We are pleased to announce the completion and outcome of the
2020-2021 reinsurance programs for both of our insurance
companies,” said Jon W. Springer, President and Chief Risk Officer
of the Company. “We are in unprecedented times and our reinsurance
partners have once again provided us with the comprehensive
reinsurance we desire for the 2020 hurricane season in the face of
tremendous financial uncertainty across the global markets. We have
been significant buyers of peak zone catastrophe reinsurance
provided by professional reinsurers for more than 20 years. These
reinsurers understand the true nature of reinsurance cycles and the
importance of the counterparties they select. While our reinsurance
costs are justifiably up over last year for a variety of factors,
including indirect macro drivers, the changes are reasonable and,
importantly, the quality of the coverage purchased for our
policyholders remains intact.”
Due to reducing capacity provided to UPCIC by the Florida
Hurricane Catastrophe Fund and an expanded need for reinstatement
premium protection, UPCIC purchased more open market capacity than
ever before and set the top of its reinsurance tower for a single
Florida event to $3.26 billion. $1.3 billion of this coverage has
limits that automatically reinstate to guarantee a certain level of
protection in multi-event scenarios.
To further insulate for future years, UPCIC secured $197 million
of new catastrophe capacity with contractually agreed limits that
extend coverage to include the 2021 and 2022 wind seasons. In
total, UPCIC has $420 million of multi-year capacity with coverage
extending to include the 2021 wind season or beyond, all of which
is below the Florida Hurricane Catastrophe Fund layer, where
reinsurance costs are the highest.
UPCIC’s first event catastrophe retention for a Florida loss was
retained at $43 million. A $43 million retention loss would
represent less than 6.4% on an after-tax basis of UVE’s
stockholder’s equity as of March 31, 2020. UPCIC increased its
first event catastrophe retention for a loss involving states other
than Florida from $10 million to $15 million. This change in
Non-Florida retention comes following growing Non-Florida premium
in-force by more than 25% over the past year.
About Universal Insurance Holdings, Inc.
Universal Insurance Holdings, Inc. (UVE) is a holding company
offering property and casualty insurance and value-added insurance
services. We develop, market, and write insurance products for
consumers predominantly in the personal residential homeowners
lines of business and perform substantially all other
insurance-related services for our primary insurance entities,
including risk management, claims management and distribution. We
sell insurance products through both our appointed independent
agents and through our direct online distribution channels in the
United States across 18 states (primarily Florida). Learn more at
This press release may contain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. The words “believe,” “expect,” “anticipate,” “will,”
“plan,” and similar expressions identify forward-looking
statements, which speak only as of the date the statement was made.
Such statements may include commentary on plans, products and lines
of business, marketing arrangements, reinsurance programs and other
business developments and assumptions relating to the foregoing.
Forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified,
including the ongoing impact of the coronavirus (COVID-19) pandemic
and those risks and uncertainties described under the heading “risk
factors” in our 2019 Annual Report on Form 10-K and our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2020. Future
results could differ materially from those described, and the
Company disclaims any intention or obligation to update or revise
any forward-looking statements, whether as a result of new
information, future events, or otherwise. For further information
regarding risk factors that could affect the Company’s operations
and future results, refer to the Company’s reports filed with the
Securities and Exchange Commission.
version on businesswire.com: https://www.businesswire.com/news/home/20200529005581/en/
Investor Relations Contact: Rob Luther, 954-958-1200 ext.
6750 VP, Corporate Development, Strategy & IR firstname.lastname@example.org
Media Relations Contact: Andy Brimmer / Mahmoud Siddig,
212-355-4449 Joele Frank, Wilkinson Brimmer Katcher
Universal Insurance (NYSE:UVE)
Historical Stock Chart
From Jul 2020 to Aug 2020
Universal Insurance (NYSE:UVE)
Historical Stock Chart
From Aug 2019 to Aug 2020