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Reinsurer rates raise in Florida


bluedevil
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Lets hope so, because they have a long, long way to go to bring pricing into line, even after the rate increases. 

 

Interesting to me will be pricing changes in July 2011 and Jan 2012 once wide spread adoption of RMS v11 is in place.  As of 6/2/11 insurers in FL will be able to use the new model in their rate filings.

 

How far off is current pricing?  With RMS v11, Flordia's residential-only average annual loss grows 38% (from previous model) to $7.5b/year.  Add avg non-cat losses of $2.8b annually and assume a 30% expense ratio, homeowners premiums need to be $14.7b to achieve a 100% CR.  What were 2010 premiums?  $8.8b!  So prices need to rise 67%!! 

 

Florida has gone five straight years without a major event, and the industry is playing russian roulett.

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