By David Bull

Feb 27 - (The Insurer) - Universal Insurance Holdings said on Wednesday that it has already placed 92% of its first event catastrophe tower ahead of its June 1, 2025 renewal, while also securing “significant” additional multiyear capacity that will carry over to the 2026 hurricane season.

Management led by CEO Stephen Donaghy addressed analysts after the Florida-based carrier reported adjusted diluted earnings per common share of $0.25 for the fourth quarter, well ahead of the consensus forecast of $0.08 as per MarketWatch.

On the call, Donaghy said the insurer continues to see progress on claims trends in its Florida book and recently filed a modest rate decrease that is directly correlated with the legislative changes made in December 2022.

“We're already well under way negotiating and placing our 2025 reinsurance program with 92% of our first event catastrophe tower already placed as we stand here today along with significant additional multiyear capacity secured for the 2026 hurricane season,” he said.

Asked for more detail on renewal dynamics, Donaghy added: “We found the market quite receptive and we always try and go out as early as possible to secure the reinsurance we need and then leave the market really to kind of dictate what’s available to others.

“We find that reinsurers like our story, like the presentation and are interested in getting on board as early as possible. We were also similarly pleased on interest in renewing multiyear capacity that takes pressure of us.”

Universal renewed its 2024/25 catastrophe reinsurance program last year with a “modest” increase in cost, as the maximum coverage under its first event tower reduced to $2.4 billion.

The combined 2024/25 program for primary insurance subsidiaries Universal Property & Casualty Insurance Company (UPCIC) and American Platinum Property and Casualty Insurance Company (APPCIC) went into effect on June 1.

The largest private reinsurance participants – Nephila Capital, Markel, RenaissanceRe, Munich Re, Chubb Tempest Re, Ariel Re, Everest Re and Lloyd’s syndicates – all maintain an A rating or higher from AM Best.

UPCIC and APPCIC set the top of their combined reinsurance tower for a single all-states (including Florida) event at $2.40 billion, compared with $2.83 billion in the 2023/24 program.

Of the 2024/25 program, $1.023 billion has limits that automatically reinstate to guarantee a certain level of protection in multi-event scenarios, which is an increase of $177 million in aggregate limit available for subsequent events over the 2023/24 period.