Coral Gables, June 25, 2024 – SL FINANCIAL is an actuarial consulting and advisory firm based in Miami, Florida. We offer actuarial consulting and advisory services for businesses and governments in both traditional (re)insurance and alternative risk financing industries.

Florida's reinsurance market, long plagued by rising costs, finally saw a sigh of relief in the June 1st renewal cycle. This follows three consecutive years of double-digit price hikes, and as predicted by analysts at SL FINANCIAL (see blogpost), 2024 marks a pause in this trend.

Modest Price Adjustments

According to a publication by Gallagher (see post), risk-adjusted rates remained flat for most programs, with some even experiencing reductions of up to 10%. This aligns with the expectation that 2023 represented the peak of the price surge. While a welcome change for insurers, reinsurers are likely content as well. Initially, the market softened considerably, but capacity became tighter closer to the renewal deadline.

Early Bird Gets the Worm

Insurers who finalized their deals in early May benefitted the most. During this period, reinsurers were eager to deploy their increased capacity, leading to a more favorable buyer's market.

However, forecasts of an above-average hurricane season in May tempered this enthusiasm. Reinsurers became more cautious, and retrocessional capacity dried up. Additionally, a record-breaking month for catastrophe bonds bypassed the Florida market, focusing on other hurricane risks.

Silver Linings

Despite these factors, there are positive signs. Firstly, catastrophe bond issuance is expected to be record-breaking in 2024, showcasing continued investor interest. Secondly, while risk spreads have widened, it is primarily due to a strong issuance pipeline, not solely due to hurricane risks. Finally, traditional reinsurers also showed increased capacity, with some even willing to expand their presence in Florida.

Key Takeaways

• Reinsurance rates remained stable or decreased slightly in 2024
• Early movers secured the best deals
• Hurricane season forecasts impacted reinsurer behavior
• Cat bond issuance is strong, but not heavily focused on Florida
• Traditional reinsurers are actively participating in the Florida market

Overall, the 2024 Florida reinsurance renewal reflects a period of cautious optimism. While some early advantages disappeared, the market seems to be stabilizing after years of significant price increases. Florida's insurance and Bermuda's reinsurance markets are dynamic. SL FINANCIAL's expertise can help you navigate these changes and secure optimal reinsurance solutions and pricing.

For any question or media inquiry, please visit our website at www.sl-financial.com or contact our team at that ceo@sl-financial.com.

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Achille Sime

CEO

ceo@sl-financial.com