United Insurance Holdings Corp. (NASDAQ:UIHC) (UPC Insurance or
the Company), a property and casualty insurance holding company, today
announced that it successfully placed a new property aggregate excess of
loss reinsurance program effective January 1, 2016 and expiring December
31, 2016.
These new contracts replace the $22 million excess of $3 million per
occurrence coverage UPC had in place for 2015 and are designed to
protect the Company against accumulated losses from all catastrophe
events except windstorms named by the National Hurricane Center.
For 2016, the Company will now retain the first $15 million of aggregate
catastrophe losses and then transfer the next $20 million of catastrophe
losses in the aggregate, excluding named windstorms. The $20 million of
aggregate limit is intended to provide additional protection against the
Company’s modeled expected loss from the catastrophe perils of winter
storm, severe convective storm, tornado and hail.
The following is a summary of key terms for the 2016 catastrophe
aggregate program:
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Frequency protection. UPC’s catastrophe losses, excluding named
windstorms, are stopped at $15 million unless the $20 million of
aggregate limit is fully exhausted.
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Severity protection. The $20 million of aggregate limit
provides protection to approximately the 100 year return period for
all natural catastrophe perils except named windstorms. A per
occurrence limit of $15 million is supplemented by a $10 million
excess of $15 million occurrence layer which ensures any catastrophe
event in excess of $15 million is covered and/or picked up by the
Company’s core property catastrophe excess of loss program which
attaches at $25 million and exhausts at $1.25 billion.
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Covers all states in which the Company writes business.
“We are pleased to have put this new catastrophe reinsurance program
into effect. It provides us much greater protection from annual earnings
degradation due to winter or convective storms than we have had in the
past,” said Brad Martz, Chief Financial Officer of UPC Insurance. “The
panel of reinsurers is very strong, and we appreciate the partnerships
we have formed with our reinsurance counterparties. Over time, these
relationships will help us manage the inherent volatility in our
business and enable us to produce consistent profitability and strong
returns on capital.”
About UPC Insurance
Founded in 1999, UPC Insurance is an insurance holding company that
sources, writes and services residential property and casualty insurance
policies using a network of independent agents and a group of wholly
owned insurance subsidiaries. UPC Insurance writes and services property
and casualty insurance in Florida, Georgia, Hawaii, Louisiana,
Massachusetts, New Jersey, North Carolina, Rhode Island, South Carolina
and Texas, and is licensed to write in Alabama, Connecticut, Delaware,
Maryland, Mississippi, New Hampshire, New York and Virginia. 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.
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