United (UPC) completes Florida consolidation, reveals $21m of Q2 cat losses
Property and casualty (P&C) insurer United Insurance Holdings Corp. (UPC Insurance) has now completed its plan to rationalise and consolidate its Florida property insurance writing, but also announced second-quarter catastrophe losses of $21 million yesterday.
The company has consolidated its four Florida domiciled insurance carriers into two, which its says creates “a more efficient operating structure going forward.”
The consolidation saw Family Security Insurance Company, Inc. merge into United Property & Casualty Insurance Company (United) with United being the surviving entity, effective May 31st.
The firm’s Journey Insurance Company (Journey) merged into American Coastal Insurance Company with American Coastal Insurance Company the surviving entity, as of June 1st. As part of this merger, $30 million of Journey’s capital was redistributed to United as well.
It simplifies things for the insurer and likely also helps to bring risk into fewer balance-sheets for reinsurance purposes which might be more efficient for United (UPC) in the hard market environment.
It’s interesting that the plan for its Florida platform changed in the making, as originally United (UPC) had announced it would reduce the four carriers down to three, but has now taken that further by reducing it to just two active underwriting platforms.
At the same time, United (UPC) pre-announced $21 million of catastrophe losses for the second-quarter of 2022, before tax and after reinsurance recoveries have been taken into account.
In addition, United (UPC) announced an estimate for adverse development on prior year losses of approximately $8 million before tax, net of expected reinsurance recoveries.
The $21 million of current quarter catastrophe losses seems a reasonably heavy burden, which could be down to the relatively high-levels of severe weather activity seen during the period.
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