The Progressive Corporation has reported that its excess-of-loss reinsurance program will reduce its gross exposure to hurricane Ida, a catastrophe event that the insurer says has driven reported and IBNR losses of $510 million in the aggregate across the US Gulf Coast and Northeast.
Progressive said that, included in its August results, are $341.9 million of catastrophe losses, or 9.7 loss ratio points, associated with Hurricane Ida.
This is most evident in the property insurance segment of Progressive’s business, where the insurer has reported a combined ratio of 225.7% and a net catastrophe loss ratio of 130.8% for the month of August.
Company wide that drove Progressive’s combined ratio for the month to 105.3%.
Some smaller catastrophe losses from hurricane Ida were also suffered in the personal lines and auto segments, it seems, but with the property business the main area of Progressive’s exposure.
Progressive explained that, within the property insurance business, it has retained $180 million of losses and $20 million of allocated loss adjustment expenses.
However, it further said that the excess was covered under the insurers per-occurrence excess-of-loss reinsurance program.
The company said that through September 15th 2021, it incurred roughly $510 million of hurricane Ida related reported and incurred but not reported (IBNR) losses in both the Gulf Coast and Northeast.
Progressive previously had an $80 million retention for its excess-of-loss reinsurance, as it reported back in March on the impacts it suffered from winter storm Uri and the Texas freeze. But this may have been adjusted at its most recent reinsurance renewal.
As a result, it’s hard to derive the actual size of the reinsurance recovery made, but it is expected to be relatively significant, given the aggregate claims burden the insurer now faces from hurricane Ida.