Item 7.01. Regulation FD Disclosure.
On June 22, 2023, Assurant, Inc. (the “Company”) announced that it has finalized its 2023 property catastrophe reinsurance program.
2023 Catastrophe Reinsurance Program Summary
The Company successfully placed nearly $1.3 billion in loss coverage within its main U.S. program, demonstrating the strength of its partnerships with over 40 reinsurers. In addition, the Company was able to mitigate price increases from the challenging reinsurance market through several key actions, including the exit of international business, optimizing product structures and the ongoing benefit of multiyear coverage. The 2023 catastrophe reinsurance program continues to address both severity and frequency, limiting the Company’s financial exposure and protecting over 3 million policyholders against severe weather and other hazards.
2023 U.S. Program Key Highlights
•The U.S. program provides approximately $1.28 billion of coverage(1) in excess of a $125 million retention for a first event; retention level drops to $100 million for a second and third event.
•Total program coverage now protects against a projected probable maximum loss (“PML”) of approximately a 1-in-225-year storm compared to a 1-in-174-year PML in 2022 as the Company was able to secure additional coverage at attractive terms, while the $125 million first event retention protects against a 1-in-5-year storm(2).
•When combined with the Florida Hurricane Catastrophe Fund, the U.S. program protects against gross Florida losses of up to approximately $1.58 billion, including additional coverage in 2023 from the Reinsurance to Assist Policyholders program created by the Florida Legislature(3).
•Layers 1 through 7 allow for one automatic reinstatement.
•2023 reinsurance premiums for the total program are estimated to be approximately $200 million pre-tax(4) based on current estimated exposure.
•Coverage was placed with more than 40 reinsurers that are all rated A- or better by A.M. Best.
(1)The 2023 catastrophe reinsurance program also includes coverage in the Caribbean of up to $55 million in excess of $5 million. Renewals are subject to changes in coverage amount, retention and cost.
(2)Probable maximum loss is projected based on estimated December 31, 2023 exposure and a blend of industry modeling tools. Actual losses may differ materially from projections.
(3) The risk retained by the Company after inuring recoveries from the Florida Hurricane Catastrophe Fund (“FHCF”) and Reinsurance to Assist Policyholders (“RAP”) program are applied to the main U.S. program retention. Once exhausted, there is no reinstatement of the FHCF or RAP coverage.
(4) Actual reinsurance premiums will vary if exposure changes significantly from estimates or if reinstatement premiums are required due to catastrophe events. Total pre-tax dollar amount includes Caribbean coverage.
(5) Retention level drops to $100 million for a second and third event.
Cautionary Statement
Some of the statements included in this Form 8-K may constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained in this Form 8-K are based upon the Company’s historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company or any other person that the Company’s future plans, estimates or expectations will be achieved. Actual results may differ materially from those projected in the forward-looking statements. The Company undertakes no obligation to update or review any forward-looking statements, whether as a result of new information, future events or other developments. For additional information on factors that could affect the Company’s actual results, please refer to the factors identified in the reports that the Company files with the U.S. Securities and Exchange Commission, including the risk factors identified in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.