The cost of obtaining reinsurance against damage from hurricanes in Florida could fall sharply again this year, according to Fitch Ratings.
It is becoming less expensive to reinsure against all kinds of natural catastrophes, partly because losses have been low for the last several years and partly because of competition from private investors willing to take on this risk. But Florida is the largest, and most widely modeled, market for U.S. property casualty risk and therefore the market where private investors have been most active. Consequently it has experienced the most reinsurance pricing pressure. Fitch said in a report published today that it expects competition between traditional and non-traditional reinsurers to remain fierce at the traditional June renewals seasons.