HCI Group, a Tampa-based insurance holding company specialising in property and casualty coverage, has finalised its catastrophe reinsurance programme for the 2025-2026 treaty year, which runs from June 1, 2025, through May 31, 2026, securing more than $3.5 billion in limit.
Last year, the insurer secured $2.7 billion of reinsurance at its June 1 renewal, so has increased the amount of limit for the 2025-2026 treaty year by around $800 million, or 30%.
This year’s programme is designed to protect the company and its insurance subsidiaries against significant losses from hurricanes, tornadoes, severe storms, and other major events.
For this treaty year, HCI secured three separate reinsurance towers, each structured to provide coverage for specific insurance operations and geographic areas.
The first tower covers all policies issued in Florida by Homeowners Choice Property & Casualty Insurance Company, an HCI subsidiary, and Tailrow Insurance Exchange, a reciprocal insurance company sponsored by HCI.
The second tower includes all TypTap Insurance Company policies, regardless of whether they are issued inside or outside Florida, as well as all Homeowners Choice policies issued outside Florida.
The third tower protects all policies issued in Florida by Condo Owners Reciprocal Exchange (CORE), another reciprocal insurer supported by HCI.
So, together, these three towers provide HCI with more than $3.5 billion in excess-of-loss aggregate coverage, along with full reinstatement premium protection, which safeguards the company against the costs associated with multiple catastrophic events during the treaty year.
HCI’s Bermuda-based reinsurance subsidiary, Claddaugh Casualty Insurance Company Ltd, participates selectively across all three towers.
This subsidiary retains certain risks when premium rates are favorable compared to the exposure. Claddaugh’s estimated maximum retained loss is approximately $117 million for the first event and $35 million for the second, with all obligations fully collateralised.
HCI’s reinsurance programme includes contracts with a wide range of private reinsurers such as Arch Reinsurance Ltd., Chubb Tempest Reinsurance Ltd., Endurance Specialty Insurance Ltd., Everest Reinsurance Company, Hannover Re, Markel Bermuda, Renaissance Reinsurance Ltd., Transatlantic Reinsurance Company, various Lloyd’s syndicates, and the Florida Hurricane Catastrophe Fund administered by the State Board of Administration of Florida.
These private reinsurers hold strong financial ratings of ‘A-’ (Excellent) or higher, or have fully collateralised their commitments to HCI.
The first reinsurance tower offers coverage of up to $1.28 billion for a single catastrophic event in Florida, with a total of $1.86 billion available for multiple occurrences.
The tower’s retention amount is set at $18 million for both the first and second events, up from 4$ million in the prior year. Coverage from the Florida Hurricane Catastrophe Fund makes up approximately 90% of $741 million, with premiums for this portion estimated at $53 million. Private reinsurance premiums, including Claddaugh’s participation, are roughly $235 million.
The second tower provides up to $925 million of coverage for a single catastrophic event in Florida and an additional $506 million for events outside the state, bringing total coverage for multiple occurrences to $1.40 billion. Retentions are also $18 million per event.
The Florida Hurricane Catastrophe Fund covers 90% of $466 million in losses here, with premiums of about $34 million. Private reinsurance premiums, including those from Claddaugh, total around $169 million.
The third tower protects CORE’s Florida policies with $181 million coverage for a single event and $245 million total for multiple events, with retentions of $3 million per event.
The Florida Hurricane Catastrophe Fund covers 90% of $52 million in losses, with premiums near $4 million. Private reinsurance premiums, including Claddaugh’s share, are approximately $22 million.
Each reinsurance tower includes reinstatement premium protection to cover the cost of restoring coverage limits if a second event occurs within the treaty year, helping to maintain financial stability without additional premium burdens.
HCI expects to pay net consolidated reinsurance premiums to third-party reinsurers, excluding Claddaugh, totalling approximately $422 million for the treaty year.
This amount is based on current exposure estimates and is subject to adjustment at the end of September 2025. The company may also consider additional risk transfer options later in the treaty year to further strengthen its reinsurance protection.
“We are grateful for the strong support from our global reinsurance partners, whose continued confidence in HCI underscores the quality of our underwriting and our disciplined approach to risk,” added Paresh Patel, HCI’s Chairman and Chief Executive Officer.
“We believe our reinsurance programmes are prudently structured to protect the long-term financial stability of our insurance companies. With the reinsurance placement now finalised, we are well-positioned to pursue strategic initiatives aimed at delivering sustained value to our shareholders.”
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