February 23, 2024

US specialist insurance group Assurant has secured more catastrophe reinsurance coverage for the year ahead at mid-year renewals, with a US limit of $1.28 billion, despite an increase in its retention.

A year ago, Assurant’s US catastrophe reinsurance program provided it with $1.16 billion in reinsurance protection, up from an initial retention of $80 million, while coverage expanded to $1.34 billion.

The tower played a role for the insurer after Hurricane Ian hit Florida last September, and Assurant received a reinsurance recovery for losses there.

Assurant’s U.S. catastrophe reinsurance tower cap will expand to $1.4 billion from 2023 to 2024, with a $1.28 billion limit available to cover losses on top of the current $125 million first-event retained amount.

Based on the second and third campaigns, Assurant’s retention is now set at $100 million.

So, obviously, more risk is retained, which is typical for most carriers going into 2023 renewals, but Assurant still has more catastrophe reinsurance limits, so it’s well positioned to defend against this US tower designed to In the event of a major loss under coverage.

Guaranteed Reinsurance - 2023

Assurant said nearly $1.3 billion of reinsurance coverage on its major US projects was obtained through contracts with more than 40 reinsurers.

Assurant said it was also seeking to mitigate the impact of rising reinsurance prices in a number of ways, including exiting international operations, optimizing product mix and developing some multi-year reinsurance coverage.

Assurant noted that the tower addresses frequency and severity issues, protecting policyholders from severe weather and other natural disaster loss events.

Importantly, Assurants said the 2023 reinsurance tower covered it for a 225-year storm compared to 2022’s 174-year PML, which appeared to be a significant increase and benefited from its own exposure reduction.

Combined with the Florida Hurricane Catastrophe Fund, Assurant’s U.S. reinsurance tower currently provides Florida with up to about $1.58 billion in total loss coverage, up from $1.34 billion in 2022.

This also includes additional coverage Assurant will receive through 2023 through the elective use of the Reinsurance Assistance Policyholder (RAP) program.

Premiums for the reinsurance tower are expected to be $200 million (before tax) in 2023, up from $189 million (before tax) in 2022.

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