KBRA Comments on June-July Reinsurance Renewals

Kroll Bond Rating Agency (KBRA) found the property catastrophe reinsurance renewals among its rated property-casualty companies were in line with expectations for the June–July period. Notably, both United Insurance Holdings Corp. and Heritage Insurance Holdings, Inc., announced increased property catastrophe reinsurance coverage at favorable pricing.

The KBRA commentary, titled Midyear Property Catastrophe Reinsurance Renewals on Track, examined United Insurance Holdings Corp.; Heritage Insurance Holdings, Inc.; WT Holdings, Inc.; Clear Blue Financial Holdings, LLC; and Kingstone Companies, Inc.

According to KBRA, many market observers had projected price increases of more than 30 percent for loss-affected layers and programs in the Florida insurance market. Loss-free catastrophe reinsurance programs in the state experienced renewal increases ranging from zero to the low double digits. In addition, there was speculation that many insurers would be unable to place their desired programs.

As expected, the renewal results varied widely and depended on performance of ceding company programs in prior years, geographic footprint, and length of relationships.

According to Willis Re, the June and July reinsurance renewal period "witnessed tangible pricing momentum" and "some tightening in terms and conditions."