Travelers changes personal insurance XoL cover to countrywide all-perils with lower retention

By Michael Loney

July 17 - (The Insurer) - Travelers at the July reinsurance renewals maintained its Northeast property catastrophe excess of loss (XoL) treaty with $1 billion of coverage and replaced its personal insurance coastal hurricane XoL protection with an all-perils countrywide treaty.

Speaking on Travelers’ second-quarter earnings call on Thursday, chief financial officer Dan Frey said Travelers renewed its Northeast property cat XoL treaty at July 1, which continues to provide $1 billion of occurrence coverage above an attachment point of $2.75 billion.

The reinsurance agreement provides all-perils coverage for losses arising from a single occurrence and allows one reinstatement. The treaty covers territory from Virginia to Maine for the period from July 1, 2025, through June 30, 2026.

Also at the July renewals, Travelers replaced its personal insurance coastal hurricane XoL treaty with an all-perils countrywide personal insurance catastrophe treaty that provides 50% occurrence coverage for the $1 billion layer above an attachment point of $1 billion.

“You may recall that last year's treaty had an attachment point of $2 billion. While in a modeled year, we wouldn't expect this to have much of an impact given the prospect of continued weather volatility, we were pleased to obtain broader coverage at a reasonable cost,” Frey said.

Travelers also has cover through the Long Point Re IV catastrophe bond placed in May 2022 with $575 million aggregate principal. Its attachment point was reset in May 2025.

The cat bond provides single occurrence coverage through May 24, 2026, for certain property losses on specified lines of business from tropical cyclones, earthquakes, severe thunderstorms or winter storms from Virginia to Maine.

For the period from May 25, 2025 through and including May 24, 2026, the cat bond provides up to $575 million, subject to a $2.89 billion retention.

An investor presentation showed that Travelers at July 1 also renewed its Canadian property catastrophe XoL reinsurance treaty.

However, a middle market earthquake catastrophe excess-of-loss reinsurance treaty that had been placed at July 1, 2024, was not shown as renewed this year, as per the presentation.

Travelers also said that other covers remaining in effect are a corporate XoL treaty, a business insurance earthquake XoL reinsurance treaty, a personal insurance earthquake XoL treaty and other international treaties.

The insurer reported a comfortable Q2 earnings beat with results that included a 9.9 percentage point improvement in the combined ratio to 90.3 and 4% net premium growth to $11.54 billion.