Kingstone Companies, Inc., a multi-line property and casualty insurance company for the New York and surrounding areas said it has renewed its catastrophe excess of loss reinsurance program at the recent renewals with broader coverage, enhanced terms and reduced costs.
The firm said that its new reinsurance arrangements beginning July 1st 2018 were placed with a panel of 46 leading reinsurance partners, which we’re told does include a handful of collateralized or ILS fund markets backing the capacity.
The $445 million of reinsurance coverage purchased was from a panel of 46 reinsurers that are all rated “A- Excellent” or better by A.M. Best, suggesting that collateralized participation will have been on a fronted basis, or from ILS markets with their own rated reinsurance vehicles.
The program is a 41.3% increase from the $315 million of reinsurance purchased in the prior year, as the insurer seeks to maintain coverage in excess of a 1 in 250 year event.
Kingstone said that the renewals saw it achieve a “mid-single digit exposure-adjusted rate reduction” compared to the prior year reinsurance placement, which is a decent saving year-on-year.
The company said that it also purchased Reinstatement Premium Protection for $215 million of the limit, which represents a 100 year return period.
Additionally, the top $50 million layer of reinsurance was secured as a two-year cover, as the firm looked to build some multi-year protection into its program.
Dale Thatcher, President of Kingstone Insurance, said on the renewal, “We are pleased with the success of our reinsurance renewal. We went to the market seeking a substantial increase in coverage limit to cover our significant growth last year and were gratified to see the support from both incumbent and new markets. Reinsurance markets continue to be favorable for high quality buyers like Kingstone, and we were able to achieve improved terms and pricing. Both are a testament to the long-term profitability and underwriting discipline of Kingstone.
“Our strong and diverse panel of 46 reinsurers include the best reinsurers in the marketplace. We are pleased to partner with them in providing additional support and protection for our already strong financial position.”
The attractive terms and reduced pricing reflects the fact that cedants which have either increased their programs, or had few losses in 2017, have managed to continue to benefit from a softening of pricing and broadening of terms at their most recent reinsurance renewals.
With Kingstone covering states including New York, New Jersey, Pennsylvania, Connecticut, Massachusetts, Rhode Island, Maine, New Hampshire, and Texas, it’s possible that the catastrophe experience of 2017 was not sufficient for markets to want an uplift at the renewal this year.