Gallagher Re’s latest mid-year renewals report has found that pricing in some cases in the Florida market has increased by up to 50%.
The report found that reinsurers had continued in their efforts to de-risk portfolios and manage net PMLs. It also found that some had existed the Florida market completely. Additionally, it found that new capacity was very difficult to source as reinsurers strongly preferred to hold their lines with limited appetite for growth.
Nationwide carriers upsized their reinsurance programmes due to inflation concerns with over $4bn in new limit purchased, with reinsurers gravitating toward these placements due to credit concerns around some of the smaller Florida domestic companies.
There was also a mixed reaction from insurers to the Florida reforms in the late special session. While some welcomed the steps taken to target litigation, reinsurers largely took a wait-and-see approach with the outcome not directly impacting capacity deployment late in the renewal. The timing of the special session caused some placements to stall as brokers and reinsurers worked through the impacts of the Reinsurance to Assist Programme (RAP) coverage.
Gallagher also found that many placements were completed after 1 June 2022 and were faced with challenges such as terms and conditions including limited peril coverage (named storms only), accelerated premiums, loaded reinstatements, special termination provisions, and broad offset clauses. Meanwhile, parametric solutions and county specific index triggers were widely used on placements, particularly to fill gaps at the lower end of programmes and behind captive.
