HCI Group Raises First-Event Retention 4% and Cuts Reinsurance Cost 10%
HCI•HCI Group finalized its 2026-2027 catastrophe reinsurance treaties with maximum first-event retention of $163 million, a 4% rise year-over-year, and an aggregate excess of loss limit of $4.1 billion, up 16% from last year. The company secured $381 million of net consolidated reinsurance premiums, reflecting a 10% cost reduction.
1. Program Completion and Key Metrics
HCI Group has finalized its 2026-2027 treaty year catastrophe reinsurance programs with a maximum first-event consolidated retention of $162.6 million (up 4% year-over-year) and secured $4.06 billion in aggregate excess of loss limit (up 16%). The net consolidated reinsurance premiums ceded to third parties are estimated at $381.2 million, marking a 10% reduction from the prior year.
2. Tower Structures and Coverage
The program is structured across three reinsurance towers: Tower 1 covers Homeowners Choice policies in central and southern Florida; Tower 2 covers Homeowners Choice and TypTap policies issued both inside and outside Florida; and Tower 3 covers northern Florida policies along with reciprocal insurance companies Tailrow and CORE. Each tower includes full reinstatement premium protection, enhancing HCI’s loss recovery capacity.
3. Subsidiary Participation Details
Bermuda-based Claddaugh Casualty Insurance selectively participates across all three towers, while the newly formed Cayman Islands-based Fortex Re joins Towers 1 and 3. All participating reinsurers hold AM Best ratings of A- or better or have fully collateralized their obligations, underpinning the strengthened risk-transfer framework.
4. Cost Impact and Strategic Outlook
The 10% reduction in net consolidated premiums reflects more efficient placements and meaningful structural improvements achieved at materially lower cost. Management expects these enhancements to bolster HCI’s capital position and support long-term earnings stability.
