Palomar Insurance Holdings, the speciality California-headquartered insurer that provides largely catastrophe exposed property products on its own balance-sheet and also provides fronting for a growing range of risks, has renewed its $25 million aggregate excess-of-loss reinsurance treaty.
Palomar purchased the $25 million aggregate reinsurance treaty for the first time in the first-quarter of 2021, as it sought to limit and cap the financial impacts of smaller severe weather or catastrophe loss events.
The company has now renewed the $25 million of aggregate excess of loss reinsurance limit, with the new contract incepting on April 1st 2022.
The aggregate reinsurance has an attachment point of $30 million and maintains coverage for qualifying events within Palomar’s per-occurrence retention.
This renewed aggregate reinsurance covers Palomar across all perils, including but not limited to earthquakes, hurricanes, convective storms, and floods, above a qualifying level per-event of $2 million in ultimate gross loss, the insurer explained.
Mac Armstrong, Chairman and Chief Executive Officer of Palomar, explained, “We are very pleased to successfully complete the placement of our Aggregate Cover.
“The Aggregate Cover is a demonstrable example of how we proactively safeguard our business, balance sheet and operating results. The reinsurance facility not only protects our business from losses generated by multiple severe catastrophic events, but also establishes a floor on our adjusted return on equity.
“Assuming the full utilization of the Aggregate Cover and the mid-point of our previously announced adjusted net income range of $80 – $85 million, our 2022 adjusted return on equity has a floor of 14%.”
Palomar also has $400 million in per-occurrence catastrophe reinsurance available from its Torrey Pines Re Pte. Ltd. (Series 2021-1) catastrophe bond issuance and the company boosted the rest of its reinsurance arrangements at its last renewal.