This article from The Insurer spotlights the discussion held during a panel at the 2023 Bermuda Risk Summit, at which Guy Carpenter’s Lara Mowery, Global Head of Distribution, joined other industry experts addressing how upcoming renewals can expect different dynamics from those experienced in the reinsurance market during January 1 renewals.
Lara said there had been a lot of lessons during January renewals that apply for upcoming renewal periods in “this very dynamically evolving market.”
“So when we take all that and we apply it to April through July renewals, I would almost set Florida aside from that as it has its own ecosystem... the insurance company dynamics are very different than a lot of other places,” Lara said. “When we think about how we’re going to navigate that ... and I know all the reinsurers in the room are going to be thrilled to hear me say this, but Florida already has undergone pretty significant rate improvement on the reinsurance side [and] some structural improvement on the reinsurance side.”
She pointed to the “significant market movement” in the Florida market at June 1 last year, and noted that since 2017 pricing has increased by 123 percent, according to Guy Carpenter’s rate on line index for property catastrophe business in the Sunshine State.
Lara acknowledged that while changes from the 2022 Florida legislative special sessions will take time to have an impact, she said earlier reforms had already begun to deliver improvements for the sector.
In particular, she highlighted the comparison between Hurricanes Irma and Ian. Irma in 2017 saw an average of 14.5 claims per day with an assignment of benefits (AOB) attached, while last year’s Ian saw just 1 AOB claim every 4 to 5 days. The average severity of claims at 120 days out for an AOB claim versus a non-AOB claim has also dropped significantly.
“So you’re seeing this significant decrease in those AOBs coming in, and you’re seeing this significant difference in severities,” Lara said. “All of that has a major impact on how we should be thinking going forward.”