Palomar added $25m of new aggregate reinsurance in first-quarter

Palomar added $25m of new aggregate reinsurance in first-quarter

Palomar Insurance Holdings, the speciality California-headquartered insurance provider that offers mostly disaster exposed residential or commercial property products, looked for to contribute to its reinsurance plans in Q1 2021 with a brand-new $25 million aggregate layer of cover.The company had actually likewise secured its $400 million Torrey Pines Re Pte. Ltd. (Series 2021-1) earthquake disaster bond during the period, however it appears frequency losses are also an issue for the carrier.
That drove Palomar to include more aggregate reinsurance protection to its tower, in order to top its exposure to the event of multiple, smaller catastrophe loss occasions.
Mac Armstrong, Chairman and Chief Executive Officer, explained, “We successfully put $25 countless aggregate excess of loss reinsurance limit throughout the quarter. The net impact of this brand-new reinsurance facility is that it puts a flooring on our operating results ought to we experience serious catastrophe activity levels like those in 2020.
” While we aim to grow and capture an increasing share of our significant market chance, we need to likewise prudently protect our balance sheet and incomes.”
One motivator for this was losses from winter storm Uri during the first-quarter, which drove some erosions to its tower and led to reinstatements needing to be paid.
Uri drove a net underwriting loss of $1 million for Palomar, and drove expenses as the business needed to pay extra reinsurance charges associated with the reinstatement of its reinsurance program.
That resulted in $4 million of extra reinsurance expense in the very first quarter of 2021, with more additional reinsurance cost in the second quarter of 2021.
Including the new aggregate reinsurance may assist to secure Palomar against some of these charges in future, with a specific cover now developed to protect it against frequency loss experience.
This brand-new $25 million aggregate excess of loss reinsurance covers all hazards for Palomar and worked April 1st.
It sits together with its $1.4 billion event reinsurance program, that offers the complete $1.4 billion of cover for earthquakes and $600 million of cover for wind occasions. Palomar also has quota share reinsurance in place to additional alleviate the expenses of catastrophes.

Leave a Reply

Your email address will not be published. Required fields are marked *

error: Content is protected !!