Having made recoveries below its combination reinsurance association in 2023, US insurance coverage large Progressive has efficiently renewed this necessary safety for 2024 and in addition bought a brand new hurricane season particular reinsurance cowl already, to run from June 1st.
As we’d reported final 12 months, Progressive had begun to document reinsurance recoveries below its combination disaster reinsurance preparations, as the corporate had forecast was prone to happen.
Now, the agency’s annual submitting exhibits that its combination losses exceeded the primary layer annual retention threshold by $17.9 million throughout 2023.
That’s decrease than the recoverable the insurer had been speaking about after its September outcomes, when it had mentioned it was recording a reinsurance recoverable of roughly $21 million.
Loss quantum apart, Progressive’s annual combination reinsurance association did what it was presupposed to in 2023, paying out when the corporate’s losses exceeded the retention.
On the January 2024 reinsurance renewals, Progressive efficiently bought a brand new combination cowl for this calendar 12 months.
The insurer mentioned {that a} new combination excess-of-loss program for claims occurring in 2024 was secured, with a number of layers offering for a complete combination reinsurance protection quantity of $185 million for disaster occasion losses and ALAE.
A primary retention layer threshold ranges from $450 million to $475 million, which is lower-down than the 2023 association, and supplies for $85 million of canopy after per-occurrence deductibles of between $5 million and $7.5 million, relying on the peril coated.
There are additionally occasion caps in place, of $42.5 million or $45 million, once more depending on the peril in query.
The second retention layer threshold for 2024 sits at $525 million, offering $100 million of canopy above that, with deductibles of $20 million or $25 million and caps of $175 million or $180 million, relying on the coated peril.
The primary layer doesn’t cowl named tropical storms and hurricanes, whereas the second layer does and in addition includes a secondary protection half with a retention threshold of $425 million that shares the identical $100 million restrict and covers named storms and hurricanes solely.
Additionally of be aware, Progressive had a 2023 hurricane season reinsurance cowl that ran from June 1st to December thirty first, which was shared restrict protection in its reinsurance program and offered $125 million in cowl.
For 2024, Progressive has already bought this hurricane season cowl once more, on comparable phrases, to run from June 1st, however this time upsized to supply $175 million in cowl.
It’s additionally value noting that, as we reported final month, qualifying combination disaster losses failed to succeed in the attachment level for one tranche of Progressive’s Bonanza disaster bonds, that means the zero-coupon one-year cat bond deal was allowed to mature and buyers bought their full capital again.
Learn all of our reinsurance renewals information.