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Growth in the portfolio of property insurance player HCI Group Inc. has resulted in a need for significantly more reinsurance at the 2025 renewals, with the company securing over $3.5 billion of limit across its towers, up 30% from the $2.7 billion secured a year ago.
HCI Group has been growing steadily, both through expansion in its home state of Florida, as well as in broadening its multi-state underwriting reach.
Alongside natural expansion of the insurance business, HCI has also been a meaningful participant in the Florida Citizens depopulation program over the last year, resulting in the assumption of thousands more homeowners policies in the state.
All resulting in more exposure and so a need to protect it, through various sources of reinsurance capital, some of which includes collateralized and ILS fund markets, we understand.
Now, for the 2025-2026 treaty year running from June 1st 2025 through May 31st 2026, HCI’s catastrophe reinsurance programs now comprise total aggregate limit of more than $3.5 billion, which is an increase of 30%.
“We are grateful for the strong support from our global reinsurance partners, whose continued confidence in HCI underscores the quality of our underwriting and our disciplined approach to risk,” explained Paresh Patel, HCI’s chairman and chief executive officer. “We believe our reinsurance programs are prudently structured to protect the long-term financial stability of our insurance companies. With the reinsurance placement now finalized, we are well-positioned to pursue strategic initiatives aimed at delivering sustained value to our shareholders.”
Three reinsurance towers have been renewed this year, up from two a year ago.
The first reinsurance tower covers Homeowners Choice Property & Casualty Insurance Company, and HCI sponsored reciprocal insurance company, Tailrow Insurance Exchange, and for all policies issued in Florida. This tower provides coverage of up to $1.28 billion for catastrophic losses from a single event in Florida and total coverage for all occurrences of $1.86 billion.
A second reinsurance tower covers all policies of subsidiary TypTap Insurance Company both in and outside Florida, as well as all Homeowners Choice policies issued outside of Florida. This tower provides coverage up to $925 million for catastrophic losses from a single event in Florida, and coverage of up to $506 million for catastrophic losses from a single event outside that state.
The third reinsurance tower HCI’s other sponsored reciprocal exchange, Condo Owners Reciprocal Exchange, for all of its policies issued in Florida. This tower provides coverage of up to $181 million for catastrophic losses from a single event in Florida, and total coverage for all occurrences of $245 million.
Across the three towers HCI has secured the $3.5 billion in excess of loss aggregate limit and full reinstatement premium protection, while its Bermuda based reinsurance entity Claddaugh Casualty Insurance Company Ltd. also participates to some degree in each.
HCI said that all of the reinsurance counterparts it has transacted with this year come with AM Best ratings of ‘A-’ (Excellent) or better, or have fully collateralized their obligations to the insurer.
There is an $18 million retention for the first two reinsurance towers, and $3 million for the third, while Claddaugh’s estimated maximum retained loss is around $117 million for a first event and $35 million for a second event.
The retentions are higher than a year ago, but given the growth in exposure and the size of the towers, that is to be expected.
HCI said that it anticipates net consolidated reinsurance premiums ceded to third parties, excluding Claddaugh, of around $422 million for the renewal year, based on exposure projections and subject to true up at September 30th 2025.
The renewed reinsurance towers will mitigate HCI Group subsidiaries risk from hurricanes, tornados, severe thunderstorms, wildfires, hailstorms, and other large catastrophes, the company explained.
Each of the reinsurance towers have been fully placed for the coming year, which Florida Hurricane Catastrophe Fund (FHCF) coverage is included for that state.
HCI explained that counterparties involved included: Arch Reinsurance Ltd., Chubb Tempest Reinsurance Ltd., Endurance Specialty Insurance Ltd., Everest Reinsurance Company, Hannover Ruck SE, Markel Bermuda Limited, Renaissance Reinsurance Ltd. and its affiliates, Transatlantic Reinsurance Company, and various Lloyd’s syndicates.
Given the names above, it’s reasonable to assume a perhaps meaningful proportion of the risk underwritten by some of these companies will have been shared with their third-party capital partnership vehicles, or affiliated ILS funds.
Read all of our reinsurance renewal news coverage.
HCI renews $3.5bn of reinsurance limit at June 1st, 30% increase on last year was published by: www.Artemis.bm
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