American Coastal gets risk adjusted decrease in “other perils” reinsurance renewal

American Coastal, the remaining carrier in the United Insurance Holdings group, has claimed a risk adjusted price decrease of 9.24% in renewing its all other perils reinsurance arrangement for 2024.

The Florida focused property insurance carrier renews this all other perils catastrophe excess of loss reinsurance to complement its main catastrophe cover for named storms that is renewed at the mid-year.

For 2024, the all other perils catastrophe excess of loss reinsurance agreement provides American Coastal provides coverage for in-force, new and renewal business, effective January 1st 2024.

The reinsurance provides up to $100 million of limit excess of $10 million per-occurrence, to lower American Coastal’s losses from catastrophe events other than named windstorms and earthquakes.

The insurer said that its subsidiary UPC Re participated in the all other perils reinsurance renewal, which served to bring its consolidated retention to $12.25 million per occurrence.

Excluding potential reinstatement premium, American Coastal says the reinsurance agreement has cost it roughly $9.9 million, which is a decrease of 9.24% year-over-year when risk-adjusted, according to the insurer.

Given this is a secondary peril focused cover for Florida, a state that has experienced significant insured losses from convective storms, severe weather, rain and floods, this may be viewed as a strong result for American Coastal.

American Coastal said that, exclusive of its retention, the all other perils reinsurance covers approximately $88 million of losses for a first event and $84 million for a second event. So amounting to $172 million in coverage in the aggregate, which is an aggregate increase of $71 million or 70.3% year-over-year.

This is our first visibility of a Florida-specific reinsurance renewal outcome and while American Coastal is a unique case, as part of the United and UPC group that had its issues over recent years, it does appear a good outcome for the company.

It’s far too early to read into this to extrapolate how reinsurance renewals may go later this year in Florida, but it shows the appetite to support carrier’s remains strong, even for the non-peak perils in the state.

Read all of our reinsurance renewal news coverage.