FedNat reports $33m storm Uri exposure, cedes $19.4m to quota share

FedNat reports $33m storm Uri exposure, cedes $19.4m to quota share

FedNat Holding Company, the U.S. main insurance carrier group, has detailed the impact of Februarys winter storm Uri and its other first-quarter 2021 catastrophe losses, along with some of the reinsurance adjustments made to help it manage the hit to its balance-sheet. FedNat said that general its first-quarter 2021 catastrophe losses are anticipated to decrease its very first quarter earnings by approximately $14.5 million, after all reinsurance healings have been accounted for.
The insurance company said that its aggregate reinsurance retention for winter storm Uri is roughly $23 million, on top of which it has a co-participation of almost $18 million in excess of $61 countless losses, which originated from the part of its reinsurance program that does not have a cascading function, permitting unused limit to drop down for subsequent occasions.
This co-participation has driven roughly $8 million of reinstatement premiums activated by winter storm Uri, which FedNat said it will reserve as delivered premium over the duration from the mid-February date of Uri through June 30th 2021.
With this reinsurance in mind, FedNat stated its total exposure to policyholder claims from Uri is therefore approximated to be $33 million.
However the company has also delivered around $19.4 countless net kept Uri losses to Anchor Re, the SageSure owned quota share reinsurance structure, decreasing FedNats approximated total net effect from Uri to roughly $13.7 million.
Other catastrophe events throughout the first-quarter have driven an extra $4.6 million effect, net of reinsurance healings, FedNat said.
FedNat likewise updated on the non-Florida quota share reinsurance arrangement it has in location with Anchor Re, the reinsurance structure of MGU SageSure, with which FedNat has a partnership plan in location.
The existing 80% quota-share reinsurance treaty was commuted effective end of January and after that participated in a new one, on an in-force and renewal basis to run through to Feb 28th 2022.
This renewed quota share reinsurance arrangement includes a limitation on the total net loss that Anchor Re can presume from FedNat throughout the treaty term.
FedNat delivered Anchor Res share of its bottom lines from winter storm Uri, on FedNats non-Florida book of company into this new quota share, though this cession was lowered by $1.5 million due to the fact that the treaty was topped with the brand-new net loss limit, the insurance provider said.
The insurance company approximates that the brand-new quota share has the capability for FedNat to cede approximately $36 countless catastrophe losses over the complete treaty term, but around $21.8 countless disaster losses have actually currently been delivered throughout the first quarter of 2021, largely from winter storm Uri.
FedNat has also highlighted that it raised some $38.1 countless extra capital, from two different raisings recently.
Adding that the tactical review it has been undergoing continues, trying to identify methods to enhance investor worth.

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