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Travelers adjusts Long Point Re III cat bond, renews cat treaties at July 1st


U.S. primary insurance carrier Travelers has adjusted the attachment point for its $500 million Long Point Re III Ltd. (Series 2018-1) catastrophe bond transaction upwards slightly for the coming year, while also renewing a range of important property catastrophe excess-of-loss reinsurance treaties at July 1st.

travelers-logoAt the annual reset, Travelers has adjusted the attachment point for its Long Point Re III catastrophe bond so that the reinsurance coverage from the bond will now kick in after a single catastrophe event occurrence causes it over $1.872 billion of losses, for the period from May 25th 2020 through and including May 24th 2021.

That’s a slightly higher attachment point than had been in place for the prior year, when the attachment of the Long Point Re III cat bond had been reset to trigger at $1.79 billion.

The $500 million of reinsurance coverage from the cat bond will now be available until Travelers covered losses from a single occurrence reach a maximum $2.372 billion.

Alongside this, Travelers has renewed its Northeast Property Catastrophe Excess-of-Loss Reinsurance Treaty at July 1st, with the treaty now set to provide coverage for 71% of losses, or $600 million out of $850 million of coverage, after a $2.25 billion retention.

This is an all perils reinsurance treaty, including but not limited to hurricanes, tornadoes, hail storms, earthquakes, winter storms and/or freeze losses. The Northeast reinsurance treaty also includes some cover for terrorism events in limited circumstances, but coverage for communicable disease and nuclear, biological and radiological terrorism attacks is excluded under the terms.

Coverage is from Virginia to Maine until June 30th 2021, but any recoveries under the Long Point Re III catastrophe bonds would be applied first to reduce losses subject to the Northeast treaty.

Also renewed at July 1st was Travelers Middle Market Earthquake Catastrophe Excess-of-Loss Reinsurance Treaty, which which covers 90% of losses from $110 million to $360 million.

This quake reinsurance treaty covers the U.S. and Canada including territories, for losses including from fire following and sprinkler leakage, to policies written by Travelers Technology, Public Sector Services and Commercial Accounts in Business Insurance, running to June 20th 2021.

Travelers Canadian Property Catastrophe Excess-of-Loss Reinsurance Treaty was also renewed for one year, covering 50% of losses in excess of C$100 million, up to C$200 million and 100% of losses in excess of C$200 million , up to C$600 million, to June 30th 2021 on a single occurrence basis.

As we reported last week, Travelers is now very close to attaching or triggering its $280 million of aggregate reinsurance coverage, after a heavy catastrophe toll from severe weather in the second-quarter added to the companies losses.

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