Reinsurance renewals news

Significant reinsurance price increases alongside much tighter terms and conditions, are expected to drive a 4% point improvement in reinsurers’ underwriting margins in 2023, according to rating agency Fitch.

The California Earthquake Authority (CEA) has seen the traditional reinsurance component of its risk transfer arrangements shrink further at the 1/1 renewals, according to the latest estimate from the insurer.

Citizens Property Insurance Corporation, the property insurer of last resort for the Florida marketplace, expects to grow its policy count by around 46% during 2023, to reach roughly 1.7 million policies in-force by the end of the year.

Because of increased exposure and an adjustment to its catastrophe risk modelling approach, the Texas Windstorm Insurance Association (TWIA) could end up buying around 46% more in reinsurance limit for the 2023 hurricane season.

The strong potential returns on offer in reinsurance after the steep rate increases seen at the January 2023 renewals could soon entice new capital to enter the market, according to international broking group Howden.

Likely in response to market conditions, as well as uncertainty over its 2022 reinsurance tower’s exposure to hurricane Ian, the National Flood Insurance Program’s (NFIP) traditional reinsurance tower has been renewed by FEMA at just $502.5 million in size for 2023, a more than 50% reduction on the prior year.

Insurance rates for residential and commercial properties in the United States that are exposed to catastrophe risks continued to rise fast in the fourth-quarter of 2022, while the hardening of reinsurance at the January renewals will now also have a trickle-down effect, MarketScout has said.

Australian primary insurance group IAG has renewed its $10 billion catastrophe reinsurance tower for 2023, but the insurers maximum first-event retention has risen 75%, which the company said was in response to inflation and global reinsurance market conditions.

Rates-on-line for non-marine catastrophe retrocessional reinsurance are now up approximately 165% on their 2017 lows, analysts at Jefferies have pointed out using data reported by broking group Howden.

Palomar Insurance Holdings, the speciality California-headquartered insurer that offers largely catastrophe exposed property products, has renewed some of its earthquake reinsurance, buying incremental limit as well, despite what its CEO terms an “unquestionably” hard reinsurance market.