United (UPC) reports $30m Q2 catastrophe losses, after reinsurance

Florida headquartered, expansive catastrophe exposed primary property insurer United Insurance Holdings (UPC Insurance) has pre-reported an expected $30 million pre-tax hit from numerous catastrophe and severe weather events that struck its book of business in the second-quarter.

The $30 million pre-tax hit is after accounting for any reinsurance recoveries made by United’s subsidiaries.

As a reminder, United recently secured almost $3.26 billion of multi-event cascading catastrophe reinsurance limit for its core protection and also renewed its quota share reinsurance arrangement.

It’s safe to assume some of the Q2 catastrophe losses being pre-announced by the company will have fallen to reinsurers, especially under the quota share where a cession rate of 22.5% covers all catastrophe perils and attritional losses for United and subsidiaries.

The company said that its second quarter catastrophe losses feature claims from 15 new catastrophe events assigned serial numbers by Property Claims Services (PCS) as well as 3 new named tropical windstorms that impacted regions where the insurer has properties under its insurance.

United estimated that the total catastrophe loss cost incurred during the second quarter of 2020 would be roughly $30 million before tax (approximately $23 million after tax) and said that this is net of expected reinsurance recoveries.

Other carriers are also likely to pre-announce losses as Q2 catastrophes and severe weather events took their toll. It’s assumed cat losses ran a little ahead of budget for some companies, as in the U.S. they seem to have been slightly above long-term averages.

United recently named a new CEO in Dan Peed, as former CEO John Forney stepped down and took on a new CEO role at specialty residential property insurance company GeoVera Insurance Holdings, Ltd.