Heritage secures more catastrophe reinsurance and higher retention at renewal

Heritage Insurance Holdings, a super-regional P&C insurer, purchased $2.479 billion of catastrophe reinsurance limit at its 2025 renewal, which is up on last year’s $2.194 billion of limit, while this year’s placement included a higher retention.

The 2025-2026 indemnity-based, catastrophe excess-of-loss reinsurance program protects the firm’s statutory insurance subsidiaries, Heritage Property Casualty Insurance Company, Narragansett Bay Insurance Company, and Zephyr Insurance Company.

The 2025-2026 catastrophe reinsurance program cost Heritage approximately $430.9 million, an increase of $7.8 million from the prior year’s renewal cost of approximately $423.1 million, with more limit secured.

At this year’s renewal, Heritage secured external party first event reinsurance tower exhaustion points of approximately $1.6 billion for the Southeast, $1.1 billion in the Northeast, and $865 million in Hawaii.

Additionally, each reinsurance tower could be supplemented with a limit purchased through affiliate Osprey Re.

The 2025-2026 catastrophe excess of loss reinsurance program includes multi-year fully collateralised indemnity coverage through catastrophe bonds issued by Citrus Re Ltd., a Bermuda-domiciled special purpose vehicle.

This year’s hurricane season limit includes a Southeast-only limit of $200 million, a Hawaii-only limit of $100 million, a Northeast-only limit of $120 million, and a $115 million combined Northeast/Hawaii limit, provided by Citrus Re.

The loss retention for Heritage is approximately $50 million for the Southeast and Hawaii, respectively, and $39.3 million for the Northeast. The retention for each insurance company is expected to be reduced by the limit purchased through the firm’s affiliate captive reinsurer, Osprey Re.

Heritage confirms that Florida Hurricane Catastrophe Fund participation of 90% is consistent with the prior year program.

Ernie Garateix, Chief Executive Officer, Heritage, commented, “I am very pleased to announce the successful completion of our 2025-2026 catastrophe excess of loss reinsurance program which demonstrates the strong commitment that we have from our reinsurance partners. In this year’s renewal, we increased the amount of limit that we purchased by approximately $285 million, while our overall cost increased by less than $8 million.

“The limit includes two new catastrophe bonds this year providing $200 million of limit. I would like to thank our dedicated reinsurance partners who have supported our business through multiple catastrophic events over the last several years and look forward to their continued partnership as we work to prudently grow the top line.

“This year’s placement included a higher retention which is consistent with our risk tolerance and strong financial position.”