Palomar Insurance Holdings, the speciality California-headquartered insurer that provides largely catastrophe exposed property products, looks set to benefit from reinsurance recoveries to help it pay claims after hurricane Ian, as the company expects a full retention loss due to the storm.
Palomar explained that it estimates pre-tax catastrophe losses of $12.5 million, net of reinsurance, for the third-quarter of 2022, in anticipation of a full retention loss of $12.5 million from hurricane Ian.
Palomar’s robust reinsurance program was increased in size at the most recent renewals and for 2022 provides the insurer with $900 million of protection for hurricane events, above a catastrophe event retention of $12.5 million.
Having hit that retention, Palomar is set to benefit from the support of its reinsurance partners for all hurricane Ian claims above that level.
Because of hurricane Ian and the reinsurance recoveries it now expects, Palomar said that it will face additional ceded reinsurance premium of $3.1 million, with $1.3 million recognized in the third quarter of 2022 and the remaining $1.8 million recognized across the period October 1st 2022 to May 31st 2023.
The company said it will update its catastrophe loss estimates with its Q3 results.
Palomar also highlighted the “complexity of the claims and preliminary nature of the information available” which could result in changes to the estimate announced.