Heritage fully places catastrophe XOL reinsurance program

Florida-based Heritage Insurance has announced that it has successfully placed its 2024-2025 catastrophe excess-of-loss reinsurance program for its subsidiaries, including Heritage Property Casualty Insurance Company, Narragansett Bay Insurance Company, and Zephyr Insurance Company.

The comprehensive reinsurance program includes several key elements. The total consolidated cost for the program is approximately $422.3 million, with this year’s cost encompassing the replacement of over $70.0 million of limit previously secured through the Florida Reinsurance to Assist Policyholders (RAP) program at no cost to the company.

First-event reinsurance tower exhaustion points have been set at $1.1 billion for the Northeast, $1.3 billion for the Southeast, and $750.0 million for Hawaii. These towers may be further fortified with additional limits that can be purchased through affiliate Osprey Re.

The 2024 program also features a new element — a $100.0 million Southeast-only limit through catastrophe bonds issued by Citrus Re Ltd. This complements existing Citrus Re 2023 catastrophe bonds, which included a $120.0 million limit for the Northeast and a $115.0 million combined limit for the Northeast and Hawaii.

Furthermore, a $100 million in-force limit from a 2022 Northeast-only catastrophe bond remains unutilized and available for the 2024 hurricane season.

Loss retentions for the company are approximately $40.0 million each for the Southeast and Hawaii and $32 million for the Northeast. These retentions could be reduced by additional coverage purchased through Osprey Re.

Heritage has also maintained a 90.0% participation rate with the Florida Hurricane Catastrophe Fund, consistent with the previous year’s program. The entire reinsurance strategy is based on indemnity, with no parametric covers included.

Ernie Garateix, CEO of Heritage, expressed satisfaction with the program’s completion and thanked the firm’s partners for the achievement.

“We value the unwavering support of our valued long-term reinsurance partners as well as new reinsurance partners and reaffirm our commitment to provide appropriate coverage 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,” he said.

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