Universal Insurance expects up to $900m in losses from recent US hurricanes

Universal Insurance Holdings expects to see a gross loss of up to $900 million related to the three devastating hurricanes that have recently impacted the United States, the insurer has stated.

Chief Executive Officer Stephen J. Donaghy, said: “As we look at the three hurricanes now, between Debbie, Helene and Milton, we’re looking at a range for all three storms, somewhere between $600 million and $900 million to the company.”

Donaghy also noted that Universal’s net retention on hurricane Debbie is small, somewhere under $20 million.

In the case of Helene, it will be a full retention loss for the company, which along with Isosceles – a captive reinsurance and segregated account platform operated by Marsh – a roughly $111 million hit to the company, with the rest being picked up by Universal’s reinsurance partners.

Hurricane Milton losses fall under the insurer’s second tower, which at $45 million has a lower retention. Universal expects that to be incurred in the fourth quarter of 2024.

“As we’ve previously disclosed, our consolidated retention drops for subsequent events and we expect a smaller financial impact from weather in the fourth quarter, inclusive of Hurricane Milton. Non-catastrophe underwriting trends continue to improve and we’re highly encouraged as we look ahead,” Donaghy commented.

The Florida-domiciled and expansive primary insurer has recently announced its financial result for the fourth quarter of 2024 reporting a combined ratio of 116.9%, up by 6.2 points compared to Q3 2023, reflecting an increase in both the net loss and net expense ratios.

The insurer’s net loss ratio increased to 91.7% in this year’s Q3, primarily due to higher weather-related losses, mainly from hurricane Helene, which were partly offset by favourable prior-year reserve development.

Donaghy added: “Our claims operation team is currently trying to assist all of our policyholders in the various areas impacted, which is a pretty serious geography for all the carriers. They are now handling the storm and we’re trying to handle as many of the claims internally as possible.

“From a claims incoming perspective, while every storm has some nuance, the claim counts have been coming in at a steady flow. I believe people were listening to the messaging to be safe and get out of the impacted areas. I think that’s a very good dynamic for the state.

“We’ve seen a steady flow rather than a real big peak so to say, so we feel good about where we’re at, and we’re hoping to recover as much of those retentions in Q4 with our operating staff.”

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