Rates up 20% to 30% at ‘Florida book’ renewals

Reinsurance rates online were due to rise by a further 20% to 30% at the 1 June ‘Florida book’ renewals, according to analysts at Berenberg, with the Russian invasion of Ukraine having an ‘accelerating’ impact.

“In our view, while the ultimate impact of the Ukraine conflict will take a while to emerge, we continue to believe that this will remain a manageable earnings event for all of the companies that we follow,” said Berenberg in a note.

Meanwhile, some Florida property insurers are exiting business in an effort to ensure their catastrophe reinsurance remains affordable as prices continue to rise, according to S&P Global.

Companies are either jettisoning policies outright or repositioning their portfolios away from areas in the state that their models calculate would lead to bigger reinsurance bills, according to Floridian rating agency Demotech. 

Some cedants are bucking the trend. Universal Insurance Holdings announced it had bought more catastrophe reinsurance protection for the 2022 hurricane season.

Matthew Palmieri, president of UPCIC, said: “Against a backdrop of wide ranging macro-economic pressures globally and an extremely challenging property insurance and reinsurance marketplace, particularly in the markets that we serve, we were able to secure the extensive reinsurance program we desired for the 2022 hurricane season.

”In fact, we were able to secure more capacity in future years, including the 2024 renewal. We appreciate our long-standing partners that have supported us for over a decade and we look forward to continuing to foster these specific key relationships as well as the new ones we established in this renewal cycle. 

“As expected, our reinsurance costs have increased modestly over the 2021-2022 period, but remain in line with our expectations and give us the operational stability and coverage certainty we need to execute our plan well into the future.”