Marc Lauricella, broker atTigerRisk Partners, specialises in the Florida market. He tells Trading Risk how Florida cedants are forcing carriers to become more bespoke.
What factors do you see shaping the market?
This June renewal was all about carriers protecting their client relationships. It’s been ultra-competitive, certainly the most competitive I’ve seen.
Markets protected their client relationships by offering more flexibility. They were offering cat capacity
more evenly across the entire client programmes and supporting a larger array of products – shared limit products, cascading layers, multi-year capacity.
You hear different views about what led to the decrease in cat pricing this year. Market pricing reflected the aggressive cat bond market coupled with the rated carriers protecting their franchise, their relationships. There’s no doubt the cat bond market was moving pricing, but rated carriers weren’t willing to lose business either, particularly their core client relationships. Further, many rated carriers were prepared to navigate this changing marketplace by buying more retro to de-risk their portfolios and improve their expected returns.