Discussing how the Florida-focused June reinsurance renewals are shaping up, Randy Fuller, Managing Director, Guy Carpenter, the reinsurance broking arm of Marsh McLennan, has suggested the California wildfires in Q1 are not expected to have a meaningful impact on reinsurer appetites or growth plans.
During a webinar hosted by AM Best, Fuller noted that with June 1 just days away, most of the firm’s programs are either complete or nearly finalised.
“Overall, I’d say this Florida renewal season is behaving pretty similarly to what we’re seeing in the broader property cat market. There’s plenty of capacity and growth appetite for reinsurers, but I’d say we’re still seeing reinsurers generally maintaining a disciplined approach to growth,” Fuller said.
He continued, “With the California wildfires, there were some initial questions about where the trajectory of the market was going to go, whether those impacts might influence reinsurer appetites in Florida and other places for the rest of the year. At the end of the day, it doesn’t look like we’re going to see the wildfires having a meaningful impact on reinsurer appetites or growth plans.
According to Fuller, Florida experienced losses last year, with Hurricane Milton significantly impacting certain reinsurance layers. He noted that despite these effects, rates near the bottom of programs have remained relatively flat.
“In the upper layers of programs, we’re seeing risk-adjusted decreases ranging from the high single digits to low teens, which aligns closely with trends observed across U.S. property catastrophe programs that were not loss-impacted,” he added.
Fuller concluded, “It’s pretty notable that that even given the losses that we saw last year, the events that we saw, most other regions that would have experienced similar events, we would have expected rate increases. I think this is a sign that the market is really in agreement that pricing is adequate in Florida, and the level of frequency that we’ve seen in these lower layers is priced in.
“It’s also worth mentioning that demand was up pretty significantly in Florida due to a number of factors, including the ongoing Citizens takeouts, and it appears that the market is going to absorb that demand pretty easily.”
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