Heritage Insurance
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First event tower for the Northeast exhausts at $1.1bn, at $1.3bn for Southeast and $750mn in Hawaii.
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Pricing on the Class A notes is at the lower edge of guidance.
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Pricing on the Class A notes moved toward the lower edge of guidance.
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The bond will insure against named storms in eight US states.
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“That’s one of the things we're monitoring ... but I think there are positive signs in the marketplace that litigation is down,” Garateix told analysts on the company’s third-quarter earnings call.
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Losses from the Maui wildfire include a modest amount of reinsurance recoveries from the Per Risk reinsurance program, while losses from Hurricane Idalia were fully retained.
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First event reinsurance tower exhaustion points are $1.3bn for the Northeast, $1.1bn in the Southeast and $870mn in Hawaii.
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Heritage’s Q1 combined ratio fell 35 points to 94.5% from the prior-year quarter, driven primarily by lower weather losses.
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The northeast deal had previously priced at the low end of the regional insurer’s targets.
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The issuance is split between $100mn-$120mn of Class A notes and $115mn Class B notes.
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The issuance is split between $80mn of Class A notes and $100mn Class B notes.
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The insurer reported an underwriting profit for Q4.
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Expanded state reinsurance support and legal reforms will be top priorities as Florida insurers face another retention loss.
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Over $20mn, the company's reinsurance cover is roughly 40 cents on the dollar, depending on the severity of the storm.
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The Florida carrier has cut total insured values in the state by 10.3% compared to Q3 2021.
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The Floridian's net loss ratio jumped nearly 18 points to 97.6%, driven by a $40mn retention from Ian and slightly lower net earned premium than the prior-year quarter.
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So far, the company has received nearly 12,000 claims associated with the storm.
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The carrier had improved its combined ratio by 6 points to 99.4%.
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The counties include Palm Beach, Polk, Orange, Broward, St Lucie, Escambia, Seminole, Osceola, Lake and Miami-Dade.
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The company also proactively suspended writing new personal residential policies in various counties in Florida, effective June 3.
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The Floridian said it had not needed to use the new Reinsurance to Assist Policyholders scheme that was created via new legislation.
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Cat bond spreads settled 11% above sponsor targets as many deals were scaled back or parked.
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The Tampa-based carrier said cat losses nearly tripled, while other weather losses also rose from last year.
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The issuance marks the carrier’s return to the cat bond market after a five-year gap
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The Floridian insurer said the write-down reflected prevailing valuation multiples.
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As part of the deal, Heritage will transfer ownership of carrier Pawtucket and MGA First Access, as well as claims and underwriting data.
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The financials from the listed Floridians show them plotting a path through challenges by exposure management and rate rises, but reinsurers are still picking up notable storm losses from this reinsurance-reliant group.
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Storm losses were down 30% to $13mn, but the prior-year result had benefitted from a one-off gain.
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Net cat losses were down, but other weather losses rose by 56% to $35.5mn.
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Despite four major storms striking the US, Heritage sees Q3 cat losses decline by 35%.
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Weather losses continued to take a relatively high toll amid a mixed picture for prior-year reserving levels.
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The Florida insurer’s CEO said he was “cautiously optimistic” that legal reforms would benefit insurers struggling with rising loss inflation.
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The Florida insurer’s combined ratio rose to an unprofitable 105.2% on higher weather losses and an increase in ceded premium.
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Heritage expects to incur $24.5mn of net current accident quarter catastrophe losses and $11mn of net current accident quarter other weather losses in Q2 2021.
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Higher underlying losses also cost the Floridian insurer, but it managed to deliver prior-year reserve releases.
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The firm's insurers picked up roughly a third of the carrier's losses for the year.