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The CEO of Universal Insurance Holdings discussed the impacts of recent hurricanes Debbie, Helene and Milton to the insurer, saying they currently estimate the gross loss from the three storms at between $600 million and $900 million.
But, with private market reinsurance and a captive reinsurance arrangement expected to respond, the retained loss across the three hurricanes could be as low as $156 million, Universal CEO Stephen Donaghy explained.
As we wrote on Friday, Universal had reported that its reinsurance was set to respond for Helene and Milton.
But the way the company has structured its reinsurance means that its net retention on the tower is lower for a subsequent even. Hurricane Helene is expected to be a full retention loss, it seems Milton is like to also be, but the lower retention will insulate Universal better from that.
Discussing the impacts of the storms, Donaghy said, “We’ve been through many hurricanes in our nearly three decade history, arming us with the requisite experience to quickly and efficiently get policy holders back on their feet. Our substantial reinsurance protection and the strong reinsurance relationships that we’ve built over many years provide us with the financial resilience to weather both high-frequency and high-severity storm seasons.”
He went on to discuss the reinsurance, saying, “As we’ve previously disclosed, our consolidated retention drops for subsequent events, and we expect a smaller financial impact from weather in the fourth quarter, inclusive of hurricane Milton. Non catastrophe underwriting trends continue to improve, and we are highly encouraged as we look ahead.”
Then, on the hurricane losses, Donaghy disclosed how the company currently sees the hurricanes hitting its balance-sheet and the reinsurance support that will be received.
“From a loss perspective, as we look at the three hurricanes now, between Debbie, Helene and Milton, we’re looking at a range for all three storms, somewhere between $600 million and $900 million to the company,” he explained.
Continuing, “Our net retention on those, Debbie’s small, it’s probably somewhere under $20 million and Helene will be a full retention loss to the company, along with our Isosceles, so roughly $111 million to the company, and the rest will be picked up by our reinsurance partners.
“Then Milton will be, as you know, our second tower has a lower retention of $45 million, so we expect that to be incurred in Q4.”
So, it seems the net retained loss from hurricanes Helene and Milton is likely to be around $156 million, with the rest of the gross losses passed onto reinsurance partners.
One final point of note, the Isosceles that Donaghy mentioned is a captive reinsurance arrangement in a segregated cell of the Marsh structure in Bermuda, Isosceles Insurance.
English (US) ·