Business Context and Reporting Period
This Form 8-K was filed by United Insurance Holdings Corp. on June 7, 2011, reporting events occurring on June 1, 2011. The filing concerns United Property & Casualty Insurance Company (UPC), a wholly-owned subsidiary, and its entry into a material definitive agreement for the 2011-2012 hurricane season.
Key Financial Metrics
The filing details a specific reinsurance contract rather than general financial performance metrics. Key figures include:
- Aggregate Coverage: $335.3 million provided by the Florida Hurricane Catastrophe Fund (FHCF).
- Attachment Point: Coverage applies to losses in excess of $117.5 million.
- Company Participation: UPC retains 10% of covered losses.
- Loss Retention Structure: UPC retains the first $10 million of loss; an affiliated reinsurer retains the next $5 million.
- Contract Premium: Approximately $30.2 million, payable in three installments (August, October, and December 2011).
Revenue, profit, cash flow, margins, debt, and liquidity figures are not provided in this filing.
Material Changes
The primary material change is the execution of the FHCF reimbursement contract effective June 1, 2011. Additionally, UPC bound excess of loss coverage with private reinsurers on the same date to cover its 10% participation requirement and losses up to the FHCF attachment point. The filing notes that final attachment points, total coverage, and costs are not finalized until December 2011.
Outlook, Risks, and Management Commentary
Management indicates that the FHCF contract covers property losses from hurricanes causing damage in Florida through May 31, 2012. A key contingency is that material terms, including total coverage and payment terms for the private reinsurance, are not finalized until after coverage is bound, which is typical for the industry. The filing does not provide specific forward-looking guidance on earnings or broader market outlook beyond the scope of this reinsurance arrangement.
Investor Verification Checklist
- Verify the finalization of the $30.2 million premium and total coverage terms expected in December 2011.
- Confirm the specific terms of the private excess of loss coverage bound to cover the 10% participation requirement.
- Monitor the payment schedule for the FHCF premium installments in August, October, and December 2011.
- Review subsequent filings for any adjustments to the $117.5 million attachment point or $335.3 million aggregate coverage.