The California Earthquake Authority (CEA), one of the world’s largest insurers of residential earthquake cover, has added TigerRisk Partners as an additional reinsurance broker to its panel of providers.
Given the size of the CEA’s reinsurance needs, around $9 billion, the insurer utilises multiple reinsurance brokers to help it in facing the market.
At the latest CEA Governing Board meeting, the decision was taken to add a second Associate Intermediary, in TigerRisk Partners.
TigerRisk will have a focus on placing reinsurance with worldwide markets, according to the Board documents.
Non-Lloyd’s worldwide reinsurance market placements will now be divided among three reinsurance brokers.
Gallagher Re plays the role of Principal Intermediary for the CEA, while Guy Carpenter is Associate and also the Lloyd’s market specialist reinsurance intermediary for the insurer.
With TigerRisk Partners now set to join and assist on worldwide reinsurance placements, outside of Lloyd’s.
In dividing the non-Lloyd’s worldwide reinsurance markets, the CEA is proposing to split them regionally and by type, with traditional Bermuda and Caribbean markets, other traditional reinsurance markets worldwide, and a final group for non-traditional, so collateralized reinsurance and capacity provided by insurance-linked securities (ILS) investors.
The CEA does not pay its brokers on a percentage basis, rather having told all respondents to its recent RFQ that the absolute maximum they could earn annually from broking its reinsurance is $5 million each, far less than if it used a typical brokerage compensation system.
Each of the brokers has been awarded the right to negotiate for the positions described above.
Recall, TigerRisk Partners is now being acquired by Howden, which will give the broker a larger footprint and bring its reinsurance and risk advisory specialism into a bigger group entity.