Commenting on the upcoming June reinsurance renewal in Florida, Marc Grandisson, President, and CEO of Arch Capital Group, expects the state’s market to be “well priced” and “very good” on a risk-adjusted basis.
As covered by our sister publication Artemis back in April, according to an array of data, Florida domestic market property insurance companies are set to experience improving performance, as the effects of recent legislative reforms take hold and market conditions improve.
For 2023, the Florida Office of Insurance Regulation (OIR) noted that Florida domestic property insurance companies reported a combined net underwriting that almost broke even, widely toted as a very positive signal given consecutive years of massive underwriting losses.
Speaking on the reforms, Grandisson observed that some of the adjustments are coming through, however, inflation is picking up, as is the potential for more storm activity in the southeast of the US.
Grandisson continued, “I think that people are trying to sort out what they will do at this point. We (Arch) already have existing relationships that we think will get us a little bit ahead of the game, in terms of participating in the marketplace.
“But the bottom line is we expect the Florida market to be well priced and very good on a risk-adjusted basis. Nothing indicates anything else other than that.”
He went on to note that Florida is still the largest property cat exposure for everybody around the world, despite the reforms which are aimed at alleviating issues associated with AOB and so on
Grandisson went on, “Even if you make some corrections we still have a couple of years before we start thinking about heavy softening in the market. There might be some here and there, but we still believe the market will be healthy as a reinsurer.”
In related news, Arch recently reported a Q1 2024 net income available to its common shareholders of $1.1 billion, marking an increase of $395 million compared to the same quarter of 2023.
As for Arch’s combined ratio in Q1 of 2024, the figure refined to 78.8%, down from 80.6% in Q1 of 2023. Meanwhile, the firm’s underwriting income in this year’s quarter was $736 million, a 29.1% increase from the previous year.