The California Earthquake Authority (CEA) has renewed $3.73 billion of reinsurance in 2024 so far, having secured almost $1.2 billion in new protection at the April 1st renewals.
At the end of 2023, the earthquake insurer had $9.1 billion of protection in-force from its reinsurance and cat bonds.
Following the January 1st reinsurance renewal this year, around $2.2 billion of the CEA’s reinsurance contracts in-force were due to expire. These were seemingly more than renewed, with over $2.57 billion of reinsurance secured at 1/1.
As mentioned, at the recent April renewal, the CEA also secured just under $1.16 billion in new reinsurance, helping to maintain its risk transfer program at the same stature it had reached at the end of 2023, and marking the renewal of $3.73 billion of reinsurance in 2024 so far.
In 2023, the earthquake insurer’s risk transfer expenses are said to have reached $585 million, which was up 18% on the previous year, driven by the effects of the hard reinsurance market. The CEA’s approved risk transfer budget is again set at just under $585 million for 2024, of which by April 30th 37.6% or just over $220 million has been used.
The CEA now has another $85.5 million of reinsurance that expired at the end of May 2024 and almost $800 million of reinsurance cover expiring before the end of July this year.
As Reinsurance News understands, this means the Authority is soon to be busy renewing and replacing much of this expiring protection.
It is worth noting that catastrophe bonds remain a very significant contributor to the CEA’s risk transfer arrangements, with $2.27 billion of outstanding coverage.
Read more about this in the catastrophe bond sponsors leaderboard of our sister publication, Artemis, where the CEA is currently in 5th position.
