Travelers expands Northeast’s disaster reinsurance partnership in restructuring –

Property damage insurer US Travelers has expanded the Northeast Property Catastrophe Excess-of-Loss Reinsurance Treaty for 2022, and the reinsurance agreement is now in place to provide the company with $750 million in coverage.

Travelers regularly renews some of its July 1 deals and this year added $100 million to its Northeast deal.

As of July 1st, Travelers benefit from a $750 million reinvestment of $850 million, approximately 88%, after a $2.25 billion savings.

A year ago, the partnership contributed $650 million to the $850 million Travelers reinsurance tower.

The Northeast Cat Agreement covers Travelers losses from Virginia to Maine from July 1, 2022 through June 30, 2023.

The covered event can occur anywhere in North America and its waters, while the restoration under the emergency management can be used first to reduce the loss of the contract.

The Travelers northeast catastrophe reinsurance agreement covers all perils, including hurricanes, tornadoes, hurricanes, earthquakes, winter storms and/or freezing temperatures.

Terrorism and cyber incidents are covered less, Travelers said, while infectious diseases and nuclear, biological and radiological crimes are not included in the reinsurance agreement.

Travelers supported new catastrophe bonds in May, which are insured by Long Point Re IV Ltd. (Series 2022-1) to protect the carrier’s $575 million in collateralized catastrophe reinsurance.

Travelers renewed its Middle Market Earthquake Catastrophe Excess-of-Loss Reinsurance Treaty on July 1st, obtaining $248 million of reinsurance for a portion of $275 million, based on reserves of $110 million.

This earthquake coverage is slightly smaller than the previous year’s $253 million coverage for the same risk.

Also revised is the Canadian Property Catastrophe Excess-of-Loss Reinsurance Treaty, which provides coverage for 50% of losses in excess of C$100 million, up to C$200 million and 100% of damages in excess of C$200 million, up to C$500 million. .

The Canadian contract last year reached C$ 600 million, so the end was reduced by C$ 100 million in the 2022 renewal.

Commenting on the restructuring, CFO of Travelers Dan Frey said, “We did see some price increases, but they are consistent with the price increases reflected in our internal book.”

Earlier this year, the airline extended its cover for accidents that occur in the event of a renewal in January 2022, but reduced its cover and revised it more tightly, reflecting market conditions and losses.

In reporting its Q2 results today, the airline also posted a bigger-than-expected loss, with a net loss of $746 million before tax of $475 million a year earlier.

The insurer said the large cat loss was responsible for a 29% drop in premiums and a 41% drop in total premiums year-over-year.

The loss of the disaster added 9 points to the combined Travelers figure for Q2 2022. It is not possible at this time to know if this affected the insurance contract of the insurance company, although we suspect that it may not have given its interest and the large loss in any case that is required in the event of a disaster. to qualify for the contract in 2022.

More information on Travelers Q2 results can be found on our Reinsurance News page.