Reinsurance to Assist Policyholders (RAP) program unnecessary despite ’deteriorating capacity for Florida risk’

US property casualty insurer Heritage Insurance Holdings has detailed the placement of its 2022-2023 catastrophe reinsurance program for its subsidiaries, including Heritage Property Casualty Insurance Company, Narragansett Bay Insurance Company and Zephyr Insurance Company.

“We are pleased to have completed our catastrophe reinsurance program integrating indemnity-based traditional reinsurance and insurance-linked securities,” a representative from Heritage commented.

“Our longstanding relationships with existing reinsurers as well as going to the market early contributed to the success of our placement. I was also pleased that the company’s program had reached a level of maturity making the new RAP program unnecessary to complete the risk transfer.

”Our super-regional strategy allowed for an orderly placement with our partners in these markets despite deteriorating capacity for Florida risk.”

The RAP program was set up in response to an increasingly challenging market for catastrophe reinsurance in Florida, with some carriers reportedly struggling to secure the capacity they need at 1 June.

Key points of Heritage’s cat reinsurance program include:

  • Total consolidated cost of approximately $359.5m, accounting for 31% of 31 March 2022, premiums-in-force, three points higher than the prior year cost which accounted for 28% of 31 March 2021 premium-in-force.
  • First event reinsurance tower exhaustion points of $1.2 billion for the Northeast, $1.3 billion in the Southeast and $780m in Hawaii with no co-participations in the syndicated program.
  • Program and costs include a limit of $100m from catastrophe bonds issued by special purpose vehicle, Citrus Re Ltd., which provides multi-year reinsurance protection at a cost of $5.1m.
  • First event consolidated loss retention in the Southeast and Hawaii of $40m, and $30.m in the Northeast. Individual Insurance companies will be less given the use of captive Osprey Re.
  • Entire program is indemnity based.
  • Florida Hurricane Catastrophe Fund participation of 90%, consistent with the prior year program.
  • Deferred the use of Reinsurance to Assist Policyholders (RAP) program created by the Florida legislature.


In addition, Heritage proactively suspended the offering of new personal residential policies in various counties in Florida, effective June 3, 2022, as the Company evaluates the impact of recent legislation on the homeowner’s insurance marketplace and awaits other meaningful and necessary legislative changes in Florida.  The Company anticipates that the suspension will be temporary as it is dedicated to the Florida market but will continue to evaluate options and the overall strategy in Florida which could entail additional suspensions or openings.