United pegs Q1 Cat Losses at $ 24M; strengthens litigation reserves in Florida

The property and casualty insurance holding company, United Insurance Holdings Corp. (UPC Insurance), recently announced catastrophe losses in the first quarter of 2021 for the current year of $ 24 million before tax, less expected reinsurance repayments.

UPC Insurance’s cat loss statement for the first quarter of 2021 is approximately $ 19 million after tax and includes claims from Winter Storm Uri, seven additional PCS cat events, and two non-PCS cat events.

At the same time, the company saw a significant increase in the volume of litigation against homeowners in Florida in the first quarter of the year.

In fact, UPC Insurance states that this has resulted in the actual loss reserve development in most accident years exceeding expectations.

Given the increase in the expected frequency of litigation in the state of Florida, the insurer plans to increase its provision for unpaid losses and loss adjustment costs from previous years of accidents by $ 30 million ($ 24 million after tax) for the first quarter of the year.

Brad Martz, President and Chief Financial Officer (CFO) of UPC Insurance, commented, “We expected the adverse trend in homeowner claims in Florida to continue through 2021, but the actual number of new lawsuits filed in the first quarter , was extremely disappointing and requires that we reassess our ultimate loss liability due to the overall increased severity of the losses. “