Universal says weather losses go over budget in Q2

Universal Insurance Holdings, the Florida headquartered and expansive primary insurance carrier, has reported suffering above budget losses due to severe weather in the second-quarter of 2020.

The carrier reported on Friday that weather related catastrophe events caused it $17 million pre-tax (approximately $12.8 million, after-tax) of losses, after taking into account reinsurance recoveries.

As a reminder, Universal recently renewed its main catastrophe reinsurance tower, securing what it called the largest private market catastrophe reinsurance renewal in its history.

Universal has quota share coverage in place, which may be the most likely segment of its reinsurance program to have responded to the severe weather activity of the second-quarter 2020.

With Universal still holding the bulk of its exposure in Florida, it’s safe to assume a decent share of the losses may have emanated from the state.

But, as Universal has expanded in recent years, it now operates in 17 other U.S. states, so the profile of its exposure to weather and other catastrophes has changed and broadened.

Universal explained that the Q2 losses are above plan, so it’s likely some reinsurance recovery has been made.

The carrier said that 14 Property Claims Services (PCS) designated catastrophe events affected its book in the second-quarter, with weather impacts felt across a number of the states where Universal does business.

As we explained last week, analysts believe that Q2 catastrophe losses will be as much as 25% above average for many carriers operating in the United States.