Florida headquartered and expanding primary insurer United Insurance Holdings (UPC Insurance) said that it expects its third-quarter 2019 results will be dented by roughly $61 million of retained catastrophe losses and adverse development from previous events.
The company has a robust reinsurance program in place, including aggregate reinsurance protection for multiple smaller events, and it’s possible the company will be calling on its reinsurers for at least a little support for the impact of Q3 catastrophes and severe weather events.
United (UPC) explained that $46 million pre-tax of the dent to Q3 results will come from loss events occurring during the quarter, including the impacts of tropical storms Barry and Imelda and hurricane Dorian.
On top of this, increased retention from non-tropical events (so severe weather losses) related to firms aggregate reinsurance program for the quarter, has also added to the bill for United (UPC).
In addition, United (UPC) estimates that it will suffer roughly $15 million pre-tax of adverse reserve development related to catastrophe losses from prior accident years.
The insurer has previously reported that it had experienced ongoing assignment of benefits (AOB) related impacts that were driving adverse prior year development. It’s possible that this continues for the firm.
How much of the Q3 bill will be picked up by United’s (UPC) reinsurance panel is uncertain, but at the least it is certainly eating into its aggregate protection retention at this stage.