1347 PROPERTY INSURANCE HOLDINGS, INC. (NASDAQ:PIH) Files An 8-K Other Events
Item 8.01 Other Events
1347 Property Insurance Holdings, Inc. (the Company, or we),
through its wholly owned subsidiary, Maison Insurance Company
(Maison), has agreed upon the terms of its excess of loss
catastrophe reinsurance program for the 2017 2018 treaty year
beginning June 1, 2017 and ending May 31, 2018. The catastrophe
excess of loss reinsurance program will reimburse Maison for
losses under its insurance policies resulting from events
affecting multiple policies. The counterparties to the
reinsurance program are reinsurers that currently have an A.M.
Best or Standard Poors rating of A- or higher, a Moodys rating of
Aa3 or higher, or, absent such rating, have fully collateralized
their maximum potential obligations in dedicated trusts.
Under our traditional catastrophe excess of loss contracts we can
recover up to $170 million in excess of a $5 million retention
per occurrence. Each layer of the traditional catastrophe excess
of loss contracts includes one reinstatement. We have purchased
reinstatement premium protection contracts to fully indemnify us
against the potential cost of reinstatement premiums under the
traditional catastrophe excess of loss contracts. We have also
purchased a catastrophe aggregate reinsurance contract providing
$25 million of coverage with no reinstatement. The catastrophe
aggregate contract can be used to indemnify us against large
losses above $175 million per event or an aggregation of small
losses subject to a franchise deductible of $250,000 per event
and an otherwise recoverable amount equal to $7 million. This $25
million of coverage limit applies to total recoveries across all
events occurring during the term of the agreement. The Company
also purchases per risk reinsurance having a retention of
$400,000 with a limit of $1,600,000.
The Company estimates that the total cost of its reinsurance
program will be approximately $24.5 million for the 2017-2018
treaty-year. The total cost for the 2016-2017 treaty-year was
approximately $21.7 million. The estimated cost and amounts of
the 2017-2018 reinsurance program are based on our current
analysis of Maisons exposure to catastrophic risk and will
ultimately be determined based upon the exposures we insure as of
September 30, 2017. From year-to-year, both the availability of
reinsurance and the costs associated with the acquisition of
reinsurance will vary. Any catastrophic event or multiple
catastrophes could have a material adverse effect on the Companys
results of operations, financial condition and liquidity.
Forward Looking Statements
This Form 8-K contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934 that are not
historical facts, and involve risks and uncertainties that could
cause actual results to differ materially from those expected and
projected. Words such as expects, believes, anticipates, intends,
estimates, seeks and variations and similar words and expressions
are intended to identify such forward-looking statements. Such
forward-looking statements relate to future events or future
performance, but reflect Company management’s current beliefs,
based on information currently available. A number of factors
could cause actual events, performance or results to differ
materially from the events, performance and results discussed in
the forward-looking statements. For information identifying
important factors that could cause actual results to differ
materially from those anticipated in the forward-looking
statements, please refer to the section entitled Risk Factors in
the Company’s Annual Report on Form 10-K for the year ended
December 31, 2016. Except as expressly required by applicable
securities law, the Company disclaims any intention or obligation
to update or revise any forward-looking statements whether as a
result of new information, future events or otherwise.
About 1347 PROPERTY INSURANCE HOLDINGS, INC. (NASDAQ:PIH)
1347 Property Insurance Holdings, Inc. is a holding company. The Company, through its subsidiaries, is engaged providing property and casualty insurance. The Company offers homeowners’ insurance, manufactured home insurance and dwelling fire insurance. It writes both full peril property policies, as well as wind/hail only exposures and it distributes policies through independent insurance agents. Maison Managers, Inc. (MMI) serves as the Company’s management services subsidiary. Its other subsidiaries include Maison Insurance Company (Maison), a property and casualty insurance company, and ClaimCor, LLC (ClaimCor), a claims adjusting company. Its homeowners’ insurance policy is written on an owner occupied dwelling, which protects from all perils, except for those specifically excluded from coverage by the policy. Its wind/hail insurance policy is written on an owner or non-owner occupied dwelling, which protects from the perils of wind and/or hail-only weather events.