Kingstone buys $490m of catastrophe reinsurance at renewal

Kingstone Companies, Inc., a multi-line property and casualty insurance company focused on New York and surrounding northeast areas of the US, has bought slightly more catastrophe reinsurance limit at the renewals, at $490 million.

It remains a smaller reinsurance program than Kingstone had a few years ago, as the insurer had purchased as much as $603 million of catastrophe limit back in 2019.

But the insurer shrank its catastrophe reinsurance program last year, in response to higher pricing and also to the fact it felt it was protecting itself more than necessary.

Kingstone previously targeted buying catastrophe reinsurance protection to cover a 1 in 250 year event, but last year said it felt 1 in 130 years was a better return-period target.

Now, at the 2021 reinsurance renewal, Kingstone has purchased $490 million of limit from reinsurers, which it has now disclosed is $15 million than the downsized program it had in 2020.

The program will run from July 1, 2021 through June 30, 2022, and like the prior year, means that Kingstone is protected to a 130-year return period.

Barry Goldstein, Kingstone CEO, commented, “I am delighted to let you know that Kingstone has finalized its 2021- 2022 catastrophe reinsurance placement. Kingstone purchased $490.0 million of total catastrophe limit, $15.0 million of additional catastrophe limit compared to last year. Consistent with last year, Kingstone protected to a 130-year return period. On a risk adjusted basis, the total cost for the program including reinstatement premium protection decreased over the prior year amount. Over 50 reinsurers, including 10 new partners to the program, participated in the program.”

Meryl Golden, Kingstone COO, added, “The numerous underwriting changes we made starting in late 2019 to better manage our catastrophe exposure and reduce the growth of our PML are clearly working as reflected in this terrific result.”

The company did not disclose what type of markets it transacted with amidst the panel of 50 reinsurance capital providers, but it’s likely there is some ILS market participation, either on a collateralized or rated and fronted basis.