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Assurant unveils $1.36bn property catastrophe reinsurance program

Published 11 July 2017

Assurant has finalized a $1.36bn property catastrophe reinsurance program, cutting down on its financial exposure and improving its ability to protect 2.8 million homeowners and renters policyholders against severe weather and other hazards.

Base reinsurance premiums for Assurant’s 2017 global catastrophe program are estimated to be $125.6 million, compared to $132.6 million in 2016. Lower premiums were driven by improved market pricing as well as a reduction in limits due to Assurant’s lower exposure from lender-placed insurance as that business continues to normalize.

“Assurant’s 2017 reinsurance program helps ensure we can support our policyholders at their time of need when catastrophe strikes,” said Christopher J. Pagano, Executive Vice President and Chief Risk Officer, Assurant.

“Managing risks is a core competency for Assurant, and again this year our catastrophe reinsurance program contains strong terms and conditions at attractive rates,” he added. “Assurant’s successful risk management strategies are essential to helping maintain the company’s financial strength while continuing to protect policyholders from risks of catastrophic events.”

2017 Catastrophe Program Components

U.S. per-occurrence catastrophe coverage includes:

  • A main reinsurance program providing $1.03 billion of coverage in excess of a $125 million retention.
  • A multiyear reinsurance contract covering a portion of the $895 million layer in excess of $260 million through 2018.
  • All layers of the program allow for automatic reinstatement and include a cascading feature that provides multi-event protection in which higher coverage layers drop down as the lower layers and reinstatement limit are exhausted.
  • Florida Hurricane Catastrophe Fund coverage for losses up to 90 percent of $324 million in excess of a $100 million retention.
  • International per-occurrence catastrophe coverage increased as Assurant continues to expand its business in select property markets. Specifics include:
  • Latin America protection of up to $183.5 million in excess of a $4.5 million retention, and Caribbean protection of up to $152.5 million in excess of a $17.5 million retention.
  • In these regions, Assurant’s product offerings are primarily residential dwelling policies covering the structure and contents.

Assurant placed its 2017 Property Catastrophe Reinsurance Program with more than 40 reinsurers that are all rated A- or better by A.M. Best.

Actual reinsurance premiums will vary if exposure changes significantly from estimates or if reinstatement premiums are required due to catastrophe events.

Source: Company Press Release