Think of reinsurance as insurance for your insurance company. It spreads out risk to reduce the financial impact of big losses. We partner with leading reinsurers in the industry – ones that are very well capitalized and many that provide full collateral to support their capacity. Our reinsurance program ensures we have the ability to pay claims and help you recover quickly after a disaster.

We have two types of reinsurance:

• Our quota share program allows us to share premium and losses at a fixed percent with reinsurers.
• Our catastrophe excess of loss (CAT XOL) program provides all-peril catastrophic coverage for widespread single events, like a hurricane, wildfire, tornado, or winter storm.

So what does that look like in action? Think about how active hurricane season is in the Gulf. Last year we saw 21 named storms! Our reinsurance agreement protects our surplus so that no more than 25 percent can be lost in two back-to-back events with 1-in-100 and 1-in-50 year probabilities.

Finally, our first-event reinsurance covers a 1-in-130 year loss. Put another way, there’s less than a 1 percent probability of encountering an event that exceeds our 2022 program’s limits. The chart above illustrates how our reinsurance protection stacks up to our projected portfolio’s modeled losses from named storms in the last 122 years.