Universal Insurance Holdings, Inc. has already placed approximately 90% of its first-event catastrophe reinsurance tower and has secured additional multi-year cover to run through the 2027 hurricane season, the firm’s CEO Stephen Donaghy said today.
Universal Insurance Holdings has often been an early entrant into the reinsurance market for its mid-year renewals and in 2026 the company has already made significant progress.
Recall that, for its 2025 reinsurance tower, Universal purchased $110 million more in reinsurance limit taking the top of the reinsurance tower for its subsidiaries to $2.526 billion, while ILS manager Nephila Capital was once again cited as a key counterpart.
Universal has highlighted Nephila and collateralized markets as key components of its reinsurance arrangements for some years now, so clearly appreciates efficient capacity backed by capital market investors.
However the company last sponsored a catastrophe bond back in 2021 and did not renew the Cosaint Re cat bond after its maturity in 2024 and has not been seen in that market since.
Highlighting progress on the 2026 reinsurance renewal placement today, Universal CEO Donaghy explained, “We’re continuing to see the benefits of Florida’s legislative reforms, which have stabilized the market, benefiting all stakeholders. Our capital position is robust and we believe our aggregate reserves are more than adequate.
“We are well underway negotiating and placing our 2026 reinsurance program with 90% of our first event catastrophe tower already placed, along with meaningful additional multi-year capacity secured for the 2027 hurricane season.”
At last year’s renewal, Universal added $352 million of multi-year coverage, which extends through the 2026-2027 treaty period, with $277 million of that multi-year reinsurance sitting below the FHCF participation, and $75 million sitting above the FHCF layer.
The additional multi-year reinsurance secured in 2026 will further extend certainty on reinsurance availability and costs for the insurer.
During the Universal earnings call Donaghy further said on conditions in the Florida insurance market, “We feel good about the business in Florida in particular, and have seen very positive things as a result. I would add that without the actions taken by the state of Florida and Governor DeSantis, the industry would not be in the position we’re in today, not just Universal.
“Without action, monies would continue to be going to third parties that weren’t impacted by a claim, and that wasn’t good for anyone.”
Asked by an analyst on the call whether Universal foresees pressure to return more benefits of rate declines to consumers, Donaghy explained that the insurer has already been passing on rate decreases.
“I think, as we continue and you’ve seen we’ve had modest declines in ’24 and ’25, we kick off our actuarial study on rate for ’26 at the end of March, and we’ll continue to do the right thing.
“A decrease in rate does not always result in a decrease in earnings, as a result of the favourable legislation and the less severity and frequency that we’re seeing, and you compile that with potential reductions in reinsurance and expenses, it’s a very favourable environment right now, and we look forward to continuing to return funds to insureds as a result of that,” Donaghy said.
He further stated, “I would also add too our retention has never been better. So we’re in a very, very good place.”
