By a News Reporter-Staff News Editor at Insurance Weekly News -- Heritage Insurance Holdings, Inc. (NYSE: HRTG) ("Heritage" or the "Company"), a property and casualty insurance holding company, previously announced that its insurance subsidiary, Heritage Property & Casualty Insurance Company ("Heritage P&C") has a catastrophe reinsurance program that provides approximately $1.75 billion in reinsurance protection for catastrophic losses and exceeds the requirements established by the Company's rating agency, Demotech, Inc., the Florida Office of Insurance Regulation. Under the reinsurance program, Heritage has a consolidated retention of approximately $20 million pretax before reinsurance coverage begins.
Bruce Lucas, Chairman and CEO of Heritage, said, "With the approach of Hurricane Irma, it's important to remember that our current year's program reduced our windstorm retention by half from $40 million to only $20 million for the first catastrophic event. We have approximately $1.75 billion of first event reinsurance in Florida. To put this amount in perspective, Hurricane Andrew, a powerful category 5 hurricane that struck southeast Florida, is estimated to produce a gross loss on our portfolio of $813.1 million. Furthermore, our reinsurance models provide that even after enduring a Hurricane Andrew loss, Heritage will only have exhausted approximately 30% of its catastrophe reinsurance. Since we were not exposed to Harvey losses in Texas or Louisiana, and we do not cover flood losses, our Q3 results should closely approximate our prior guidance, which would be offset by an amount up to $20 million pretax if Irma makes a Florida landfall. Heritage had approximately $189 million of statutory surplus as of June 30, 2017. Heritage also has over $600 million of multiyear catastrophe bonds with set pricing. This fixed pricing provides a hedge against future reinsurance rate increases that is unique in the Florida market."
Keywords for this news article include: Heritage Insurance Holdings Inc.
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