Assurant, a global provider of risk management solutions, announced it has finalized its $1.4 billion 2016 property catastrophe reinsurance program, reducing its financial exposure and safeguarding its ability to protect more than 2.4 million homeowners and renters policyholders against severe weather events and other perils.
Base reinsurance premiums for the global catastrophe program are estimated to be $140 million1 in 2016, compared to $162 million in 2015.
Lower premiums were driven by improved market pricing along with Assurant’s lower exposure from lender-placed insurance as that business normalizes.
“This program is a critical component of our risk management strategy, designed to protect Assurant’s financial position. This allows us to be there for our policyholders when they need us the most,” said Christopher J. Pagano, chief financial officer and treasurer of Assurant.
Pagano, who will transition to the role of chief risk officer on July 18, added that this year’s program provided Assurant increased flexibility as the favorable pricing environment allowed the company to improve terms and conditions.
2016 Catastrophe Program Risk Management Components
Assurant’s U.S. retention declined nearly 20 percent to $125 million from $155 million in the prior year, primarily due to reduced lender-placed insurance business exposure.
U.S. per-occurrence catastrophe coverage provides $1.1 billion of protection in excess of a $125 million retention. All layers of the program provide the option for automatic reinstatement. They also include a cascading feature to provide multi-event protection so that when the limit of a layer and reinstatement limit is exhausted the layer above drops down in its place.
Florida Hurricane Catastrophe Fund covers losses up to 90 percent of $392 million in excess of a $123 million retention.
U.S. per-occurrence catastrophe coverage provides $1.1 billion of protection in excess of a $125 million retention. All layers of the program provide the option for automatic reinstatement. They also include a cascading feature to provide multi-event protection so that when the limit of a layer and reinstatement limit is exhausted the layer above drops down in its place.
Florida Hurricane Catastrophe Fund covers losses up to 90 percent of $392 million in excess of a $123 million retention.
Caribbean and Latin America catastrophe coverage increased as Assurant expanded its business in select property markets. Specifics include:
Coverage in Latin America of up to $151.5 million in excess of $4.5 million retention and in the Caribbean, protection up to $145 million in excess of $15 million retention. In these regions, Assurant’s product offerings are primarily residential dwelling policies, covering the structure, contents and liability.
Coverage in Latin America of up to $151.5 million in excess of $4.5 million retention and in the Caribbean, protection up to $145 million in excess of $15 million retention. In these regions, Assurant’s product offerings are primarily residential dwelling policies, covering the structure, contents and liability.
Assurant placed its 2016 Property Catastrophe Reinsurance Program with more than 40 reinsurers rated A- or better by A.M. Best.