By Chris Munro

May 9 - (The Insurer) - Heritage Insurance Holdings will enter the North Atlantic hurricane season with its insurance subsidiaries backed by a 2025/26 catastrophe excess of loss (XoL) reinsurance program that has had its limit increased by $285 million to $2.479 billion.

In an update issued after the markets closed on Thursday, Tampa, Florida-based Heritage confirmed it has fully completed the placement of the indemnity based, catastrophe excess-of-loss reinsurance program that covers its Heritage Property Casualty Insurance Company, Narragansett Bay Insurance Company, and Zephyr Insurance Company subsidiaries.

Under the new cat XoL program, which is entirely indemnity based with no parametric covers, Heritage has purchased $2.479 billion of limit, up 13% from the prior-year protection’s $2.194 billion.

While the company has increased the amount of limit it has bought, its retentions before the program is triggered have also been raised.

Its loss retention now stands at approximately $50 million for the Southeast and Hawaii, respectively, up from $40 million on the prior-year program.

For the Northeast, the loss retention under the new protection stands at $39.3 million, compared with $32 million on the 2024/25 program.

As Heritage noted, the retention for each insurance company is expected to be reduced by limit purchased through affiliate captive reinsurer Osprey Re.

Heritage CEO Ernie Garateix said the increased retentions are “consistent with our risk tolerance and strong financial position.”

The newly renewed XoL program was completed at a consolidated cost of approximately $430.9 million, an increase of $7.8 million from the prior year’s renewal that cost around $423.1 million.

As Heritage noted, its newly placed protection has an external party first event reinsurance tower exhaustion point of approximately $1.6 billion for the Southeast, $1.1 billion in the Northeast and $865 million in Hawaii.

Each reinsurance tower may also be supplemented with additional limit purchased through affiliate Osprey Re.

Alongside coverage secured from traditional reinsurers, Heritage’s 2025 cat XoL program includes fully collateralized multiyear indemnity coverage through catastrophe bonds issued by Bermuda-domiciled special purpose vehicle Citrus Re.

Through those cat bonds, there is Southeast-only limit of $200 million, Hawaii-only limit of $100 million, Northeast-only limit of $120 million along with an additional $115 million combined Northeast/Hawaii limit.

Heritage’s latest cat XoL program includes 90.0% participation from the Florida Hurricane Catastrophe Fund participation, unchanged from the company’s 2024/25 reinsurance coverage.

Garateix said Heritage’s 2025/26 XoL program “demonstrates the strong commitment that we have from our reinsurance partners”.