Orderly June Florida reinsurance renewal leads to price declines: JMP

JMP Securities, an investment bank and brokerage firm, reports that the June 1 Florida reinsurance renewal proceeded smoothly, with increased supply largely matching the higher demand, leading to an overall expectation of single-digit price declines.

In contrast to the Florida-focused June 1 renewal last year, this year’s process unfolded earlier and with greater organisation. The surge in supply effectively met the heightened demand.

Pinpointing precise rate adjustments proves challenging due to factors such as cedant, layer, and retention variations. However, industry insiders concur on a general mid-single-digit decline in rates across the board.

While capacity was abundant for larger programmes, securing coverage for smaller ones remained a challenge as reinsurers upheld the elevated retentions established during the previous renewal cycle.

Reinsurers find their peak wind exposures on the rise after a period of decline, indicative of recent substantial enhancements in pricing and terms. Following years of pricing enhancements and recent legislative actions regarding tort reform in Florida, this trajectory seems to be stabilising. Many reinsurers have expanded their exposure both in 2023 and thus far in 2024.

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