HCI’s Idalia loss to be within reinsurance retention limits

Florida carrier HCI Group expects its pre-tax gross loss from Hurricane Idalia to be within the reinsurance retention limits for each of Homeowners Choice Property & Casualty Insurance Company and TypTap Insurance Company.

Tampa-based HCI said it has received claims from Idalia which made landfall in Keaton Beach, Florida as a Category 3 hurricane on 30 August.

The company said it does not expect the storm to require it to utilise any of the capacity in either of its reinsurance towers.

“Our focus at this time is on our policyholders, and ensuring their claims are handled quickly and efficiently,” said Paresh Patel, HCI’s chairman and chief executive officer.

Insured losses from Idalia look set to be much lower than was initially feared as the storm approached Florida.

Earlier this week Moody’s RMS estimated total private market insured losses from Idalia at between $3bn and $5bn, with a best estimate of $3.5bn.

That followed Verisk estimating total insured losses from the storm of between $2.5bn and $4bn, with the majority of losses driven by wind damage.

Both of those estimates came in above the $2.2bn figure provided by Karen Clark & Company last week.

As previously reported, HCI increased the reinsurance coverage for both its Homeowners Choice and TypTap subsidiaries at the 1 June reinsurance renewal.

The company reduced the number of towers in its program to two, from four last year.

Tower 1’s 2023-2024 reinsurance program provides coverage up to $992.8mn for catastrophic losses from a single event in Florida. The tower’s total coverage for all occurrences is $1.42bn, while the reinsurance retention is $12.5mn for both first and second events.

Tower 2’s 2023-2024 reinsurance program provides coverage up to $684.2mn for catastrophic losses from a single event in Florida. The tower provides coverage up to $337mn for catastrophic losses from a single event outside of Florida. The total coverage for all occurrences is $990.8mn, while the reinsurance retention is $9.0mn for both first and second event.