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Reinsurers driving hard bargain

Reinsurers are “holding the line” on price as the clock ticks down on June 1 renewals for Florida property-catastrophe coverage.

Analysts from JMP Securities said after meeting with reinsurers in Bermuda last week that they expected rates will largely be up by between 15 and 20 per cent, as carriers aim to drive a hard bargain after some heavy storm losses over the past two years.

They added that “the majority of renewals were not complete” and that “with only five to six business days to go before June 1, we found things to be eerily quiet”, risk transfer website Artemis.bm reported.

The analysts added that reinsurance capacity providers appeared “remarkably relaxed”, while brokers were busy, but not panicked about getting renewals sealed.

“Ultimately, we believe that all major programmes will clear the market, but that private layers and/or price increases on certain layers may be necessary to get some to the finish line,” JMP analysts stated.

Meanwhile, loss estimates from Typhoon Jebi continue to climb and could settle at between $15 billion and $16 billion, Bermudian industry participants told the JMP analysts. This would make it the most costly insured loss from a typhoon in Asia on record.

The cyclone caused widespread damage in September last year when it became the strongest storm to hit Japan in 25 years.

Three weeks ago, Swiss Re estimated the Jebi industry loss at $13 billion.

Devastating hit: homes lie in ruins in Mexico Beach, Florida after the visit of Hurricane Michael last October (Photograph by Gerald Herbert/AP)

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Published May 29, 2019 at 9:00 am (Updated May 28, 2019 at 8:50 pm)

Reinsurers driving hard bargain

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