TORONTO, July 05, 2017 (GLOBE NEWSWIRE) -- Crosswinds Holdings Inc. (“Crosswinds” or the “Company”) (TSX:CWI) announces that its joint venture investee, Monarch National Insurance Company (“Monarch National”), has agreed upon the terms of its excess of loss catastrophe reinsurance treaties for the 2017 – 2018 hurricane season. The Company has an indirect 36% interest (50% voting) in Monarch National.
These treaties are designed to reimburse Monarch National for property losses under its homeowners’ insurance policies resulting from covered events. Monarch National utilizes reinsurance to reduce exposure to catastrophic risk and to help manage capital, while lessening earnings volatility and improving shareholder return, and to support the required statutory surplus requirements. Monarch National’s catastrophe reinsurance program has been designed to coordinate coverage provided under various treaties with various retentions and limits.
Monarch National’s private market excess of loss treaties are effective July 1, 2017 continuing through June 30, 2018 and all private layers have prepaid automatic reinstatement protection, which affords Monarch National additional coverage. These private market excess of loss treaties structure coverage into layers, with a cascading feature such that substantially all layers attach after $3.4 million for Monarch National’s exposure. If the aggregate limit of the preceding layer is exhausted, the next layer drops down (cascades) in its place. Additionally, any unused layer protection drops down for subsequent events until exhausted. These treaties are with reinsurers that currently have an A.M. Best Company or Standard & Poors rating of A- or better, or have fully collateralized their maximum potential obligations in dedicated trusts.
The total estimated cost of USD$5.17 million to Monarch National is comprised of approximately USD$3.23 million for the herein referenced private reinsurance products including prepaid automatic premium reinstatement protection on all layers along with approximately USD$1.94 million payable to the Florida Hurricane Catastrophe Fund (“FHCF”). The combination of private and FHCF reinsurance treaties will afford Monarch National with approximately USD$109.81 million of aggregate coverage with a maximum single event coverage totaling approximately USD$68.89 million, exclusive of retentions. Monarch National’s FHCF participation is at 75% for this wind season.
The cost and amounts of reinsurance are based on management’s current analysis of Monarch National’s exposure to catastrophic risk. Monarch National’s data will be subjected to exposure level analysis as of various dates during the period ending December 31, 2017. This analysis of its exposure level in relation to the total exposures to the FHCF and excess of loss treaties may produce changes in retentions, limits and reinsurance premiums as a result of increases or decreases in Monarch National’s exposure level.
Crosswinds Holdings Inc.
Crosswinds is a publicly traded private equity firm and asset manager targeting strategic and opportunistic investments in the financial services sector with a particular focus on the insurance industry.
Caution Regarding Forward-Looking Information
This release includes certain forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plans” or “continue” or the negative thereof or variations thereon or similar terminology. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. These forward-looking statements are subject to a number of risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements. Reference should be made to the risk factors in the Company’s 2016 Annual Information Form, in the Management’s Discussion and Analysis for the year ended December 31, 2016 and in our other filings with Canadian securities regulators. Additional important factors that could cause actual results to differ materially from expectations include, among other things, actual catastrophic risk exposure and general economic and market factors.