Reinsurance renewals news

After many insurance and reinsurance companies reported elevated catastrophe losses for the first-quarter of 2021, analysts have said that their catastrophe budgets for the year are facing early pressure, with hurricane season now upon us.

Third-party sources of reinsurance capital, largely from the insurance-linked securities (ILS) market, has dominated the reinsurance renewal of Florida’s Citizens Property Insurance Corporation in 2021, with ILS giant Nephila Capital the biggest market by a long way thanks to a $600 million line.

Global reinsurance giant Swiss Re has forecasted continued rate hardening for the insurance and reinsurance market right the way through 2022, with re/insurers reduced risk appetites due to numerous factors the main driver of rising prices.

The Texas Windstorm Insurance Association (TWIA) has further demonstrated its commitment to the catastrophe bond market at its 2021 reinsurance renewal, with multi-year coverage from the capital markets now making up 57% of its $1.93 billion program tower.

With the 2021 Atlantic hurricane season now upon us and forecasts calling for another above average level of activity this year, Moody’s Investors Service highlighted challenges this may present to the reinsurance sector, but remains positive on more price momentum, whether it is an impactful year for losses or not.

Risk-adjusted pricing for property catastrophe reinsurance was up by between 5% and 10% on average at the June 1st renewals, according to the latest data from HX, the data, analytics and advisory division of Howden Group Holdings.

Universal Insurance Holdings, the Florida headquartered and expansive primary insurance carrier, has purchased the largest catastrophe reinsurance tower in its history for the second year running, lifting its Florida first-event cover to over $3.4 billion.

Recent low rates and strong execution in the catastrophe bond market is not the only thing weighing on reinsurance rates around this mid-year renewal season, there is also start-up and newly raised capital to consider.

United Insurance Holdings (UPC Insurance), the Florida headquartered insurer, has renewed its core catastrophe reinsurance program with changes to ensure it retains fewer losses and enhanced aggregate features to provide more protection against frequency loss events.

Rating agency AM Best has chimed in on the issues facing the Florida property insurance market and chief among them is the fact many are going to struggle to maintain their surpluses, leading some to downsize, shed business and move away from the coast.