HCI Group has announced the completion of its catastrophe reinsurance programs for the 2024-2025 treaty year, running from June 1, 2024, through May 31, 2025.
HCI secured two reinsurance towers for its insurance subsidiaries, Homeowners Choice and TypTap, similar to the prior year. Reinsurance Tower 1 covers all Homeowners Choice policies issued in Florida.
Reinsurance Tower 2, on the other hand, is shared between TypTap and Homeowners Choice, covering all TypTap policies (whether issued in Florida or outside of Florida) and Homeowners Choice policies issued outside of Florida.
Across its two reinsurance towers, HCI secured over $2.7 billion in aggregate limit for the 2024-2025 treaty year. HCI noted that all of its private reinsurers are AM Best rated ‘A-’ (Excellent) or better, or have fully collateralized their obligations to HCI.
HCI’s reinsurance retentions are similar to the prior year, with a retention of $14 million for Reinsurance Tower 1 and $9 million for Reinsurance Tower 2. These retentions apply to each of a first and second event.
For Reinsurance Towers 1 and 2, HCI Group expects to incur net consolidated reinsurance premiums ceded to third parties, excluding Claddaugh, of approximately $333.6 million from June 1, 2024, through May 31, 2025, assuming no losses occur during that period. HCI’s reinsurance premiums are an estimate based on exposure projections and subject to true-up at September 30, 2024.
“We appreciate the broad support we received from our valued reinsurance partner. HCI continues to maintain a conservative approach to its reinsurance placement. This includes securing additional limit this year to support the significant growth we have achieved over the past few months,” HCI’s chairman and chief executive officer Paresh Patel said.
HCI’s reinsurance program also bolsters its growing base. In December, the group announced that it had picked up around 6,800 policies from Citizens, Florida’s insurer of last resort, amounting to approximately $30 million of in-force premium.
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