Palomar Insurance Holdings, the speciality California-headquartered insurer that offers largely catastrophe exposed property products, has renewed some of its earthquake reinsurance, buying incremental limit as well, despite what its CEO terms an “unquestionably” hard reinsurance market.
Palomar said last night that it has successfully completed the renewal and placement of certain reinsurance programs covering California earthquake risk.
This is one of Palomar’s peak exposures and an area of growth for the company, as it sees an opportunity to provide earthquake cover in California and targets expansion there.
The company said that it has renewed its California Commercial Earthquake quota share reinsurance program, and increased the cession percentage associated with that at the same time.
In addition, Palomar said that is has secured additional earthquake excess of loss (XOL) reinsurance limit.
In total, across the Cal quake reinsurance arrangements placed, Palomar said it has purchased roughly $50 million of incremental limit.
This additional limit has been purchased to enable the company to “capitalize on opportunities it sees in the residential and commercial earthquake insurance markets.”
Commenting on the news, Mac Armstrong, Palomar’s Chairman and Chief Executive Officer, explained, “In the face of what is unquestionably a hard reinsurance market, we are pleased to not only successfully renew our California Commercial Earthquake quota share program but also procure incremental reinsurance limit to support our earthquake lines.
“We strategically increased the cession amount of the California Commercial Earthquake quota share to provide flexibility in how we participate in the commercial earthquake market and moreover take advantage of dislocation in the earthquake market broadly.
“We appreciate the support of our reinsurer panel and believe that our single peril business lines remain attractive to this cohort of reinsurers and the market broadly.”
Palomar has been building out its reinsurance towers as it has expanded the business in recent years.
At the mid-year 2022 reinsurance renewals, Palomar increased its reinsurance program limit, adding $430 million of incremental reinsurance limit for earthquake coverage and $200 million of incremental windstorm related limit.
The company also sponsored its third catastrophe bond in May.
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