United Insurance Holdings Corp. Secures 2021 - 2022 Core Catastrophe and Quota Share Reinsurance Programs

Rhea-AI Summary

United Insurance Holdings Corp. (Nasdaq: UIHC) has successfully completed its core catastrophe reinsurance program and quota share program effective June 1, 2021. The 2021 Core CAT program features $2.85 billion in first event limit and a retention reduction of 53% year over year, lowering per occurrence retention to $15 million. This limits net retained hurricane losses to $31 million for its core portfolio. Additionally, the company renewed a 15% quota share treaty, increasing total cession to 23%. The company also explores strategic options, including potential sales to enhance capacity for commercial specialty underwriting.

Positive

• Core CAT program includes $2.85 billion of first event limit, providing significant coverage.
• Retention for hurricane losses reduced by 53% year over year, strengthening financial stability.
• Net retained hurricane losses limited to $31 million, minimizing potential financial impact.

Negative

• None.

United Insurance Holdings Corp. (Nasdaq: UIHC) (UPC Insurance or the Company), a property and casualty insurance holding company, announced today that it has completed its core catastrophe (Core CAT) reinsurance program and Quota Share program for United Property & Casualty Insurance Company (UPC), Family Security Insurance Company, Inc. (FSIC) and American Coastal Insurance Company (ACIC) effective June 1, 2021.

The 2021 Core CAT program includes $2.85 billion of first event limit on a fully cascading basis except for the Florida Hurricane Catastrophe Fund layers. For the 12 months ending May 31, 2022, the per occurrence retention is $15.0 million for both the first and second events, down from $46.25 million for the first event and $17.5 million for the second event in 2020, a 53% reduction in aggregate year over year. Furthermore, the Core CAT program contains enhanced aggregate coverage features, which limit the accumulation of hurricane and earthquake retained losses.

Should the 2020 hurricane season repeat itself, the Core CAT program would limit net retained hurricane losses to $31.0 million on the Company’s core portfolio of residential and commercial property insurance. The Company separately reinsures the catastrophe risk of business written by Interboro Insurance Company and Journey Insurance Company.

In addition to the Core CAT program, UPC, FSIC and ACIC renewed the 15% quota share treaty effective June 1, 2021 which along with the existing 8% quota share treaty effective December 31, 2020, brings the total cession to 23% for the duration of the 2021 hurricane season.

Also today, as a continuation of the Company’s strategy to deleverage its capital and balance commercial and personal lines, the Company announces it is considering strategic and financial alternatives to create capacity for expanding commercial specialty underwriting and general corporate purposes, including the retention of Raymond James & Associates and the possible sale of Interboro Insurance Company.

About UPC Insurance

Founded in 1999, UPC Insurance is an insurance holding company that sources, writes and services personal and commercial residential property and casualty insurance policies using a group of wholly owned insurance subsidiaries through a variety of distribution channels. The Company currently writes policies in Connecticut, Florida, Georgia, Louisiana, Massachusetts, New Jersey, New York, North Carolina, Rhode Island, South Carolina and Texas. From its headquarters in St. Petersburg, UPC Insurance's team of dedicated professionals manages a completely integrated insurance company, including sales, underwriting, customer service and claims.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210527005873/en/

FAQ

What is United Insurance Holdings Corp.'s core CAT reinsurance program for 2021?

United Insurance Holdings Corp.'s core CAT reinsurance program for 2021 includes a $2.85 billion first event limit and a reduction in per occurrence retention to $15 million.

How has United Insurance Holdings Corp. reduced its hurricane loss retention?

The company has reduced its hurricane loss retention by 53% year over year, from $46.25 million to $15 million for the first event.

What is the total quota share for United Insurance Holdings Corp. as of June 2021?

As of June 2021, the total quota share for United Insurance Holdings Corp. is 23% after renewing a 15% treaty and retaining an existing 8% treaty.

What strategic actions is United Insurance Holdings Corp. considering for expanding commercial specialty underwriting?

The company is considering strategic and financial alternatives, including the potential sale of Interboro Insurance Company, to create capacity for expanding commercial specialty underwriting.