Agenda 03/24/2020 Item #16E 1 (Property Insurance Purchase)03/24/2020
EXECUTIVE SUMMARY
Recommendation to approve the purchase of Property Insurance effective April 1, 2020 in the
estimated amount of $4,195,687.
OBJECTIVE: To protect the County’s real and personal property assets against losses caused by natural
and man-made perils and to comply with the Stafford Act.
CONSIDERATIONS: The Board of Commissioners purchases property insurance to protect the
County’s real and personal property assets against losses caused by natural and man-made perils and to
comply with the Stafford Act.
The County’s property insurance program is purchased in accordance with Section 311 (42 U.S.C. 5154)
of the Stafford Act which requires that an applicant for FEMA assistance “shall comply with regulations
prescribed by the President to assure that, with respect to any property to be replaced, restored, repaired,
or constructed with such assistance, such types and extent of insurance will be obtained and maintained
as may be reasonably available, adequate, and necessary, to protect against future loss to such
property.” Staff submits the program to the Florida Department of Insurance for approval on an annual
basis to assure compliance with the Act.
The current property insurance program expires on April 1, 2020 and contains the following provisions.
Total insured values are $985,357,465. The total limit of coverage purchased (a/k/a the Loss Limit) is
$75,000,000. The named storm wind deductible is 3% per building and contents with a minimum named
storm deductible of $250,000. Retained losses are capped at $5,000,000 per named storm. For all other
perils the deductible is $50,000 per occurrence. Primary flood coverage is purchased through the
National Flood Insurance Program (NFIP) on properties in special flood hazard zones. The property
insurance program provides an additional $75,000,000 of flood coverage in excess of the NFIP coverage
of $500,000 per building maximum.
For FY 20, these major coverage provisions remain unchanged with one exception. The Real Property
Division recommends that insurable replacement values be increased 1.9% to $1,003,970,388 to reflect
increased insurable property.
Although total insured values are $1,003,970,388, it is unlikely that the county will suffer a total loss.
Therefore, the county purchases what is known as a “loss limit” that is commensurate with the probable
maximum loss (PML) for a 100-year wind event. A PML study is completed for the underwriters by Risk
Management Solutions, Inc. to determine the appropriate loss limit to purchase. For FY 20, the PML is
$66,675,850 for a 100-year wind event. Staff recommends that the County continue to purchase a
$75,000,000 loss limit.
The FY 20 renewal was expected to be difficult. In the years 2017 - 2019; many insurance carriers were
operating at loss ratios of 100% or greater due to catastrophic events that included Hurricanes Harvey,
Irma, Marie, Michael and Dorian as well as Mexican Earthquakes, California Wildfires and wind and hail
claims in North Texas, Oklahoma, and Colorado. Further, due to updated hurricane modeling,
underwriters have tightened underwriting guidelines for accounts in catastrophe exposed areas.
Reinsurance treaties are negotiated primarily in January, April and July each year. Thus, renewals after
January 1, 2020 are reflecting the effects of the recent catastrophes on the reinsurance markets. This was
not unexpected as property insurance pricing is cyclical.
The County’s broker, Insurance and Risk Management Services, approached thirty-seven (37) carriers for
proposals. Twenty-eight (28) carriers declined to quote. Nine (9) carriers submitted quotes. Of those that
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03/24/2020
declined to quote, the most common reasons were 1) they could not offer terms at the requested pricing;
2) they could not support the broad scope of the current manuscript property policy form; and 3) they are
not willing to participate in a program that includes a named storm deductible cap.
Based upon the responses received from the market, the cost to maintain the current program at the
updated replacement values, current loss limit and at the existing terms and conditions is $4,195,687. This
represents an increase of 16.4% in the rate and a gross premium increase of 18.4% or $653,377 over the
FY19 renewal.
In terms of financial stability, each of the carriers possess a minimum Best’s rating of A- or higher.
Covered perils are written on an “All Risk of Loss” basis. Loss valuation is on a replacement cost basis.
Terrorism coverage is included in the proposal. There are no other substantial changes to the program.
The renewal comparison over a four-year period is illustrated below:
Renewal
Date
Deductible Terms Annual
Premium
Composite
Rate per
$100
% Change
in Rate per
$100
$ Change
in Gross
Premium
% Change in
Gross
Premium
FY 17
Renewal
3% Named Storm
Deductible with
$5,000,000 Cap
$2,330,299 .254 -3.4% -$77,500 -3.2%
FY 18
Renewal
3% Named Storm
Deductible with
$5,000,000 Cap
$3,046,523 .317 +24.8% +716,224 +30.7%
FY 19
Renewal
3% Named Storm
Deductible with
$5,000,000 Cap
$3,542,310 .359 +13.2% +495,787 +16.3%
FY 20
Renewal
3% Named Storm
Deductible with
$5,000,000 Cap
$4,195,687 .418 +16.4% +653,377 +18.4%
FISCAL IMPACT: The final premium is subject to the Statement of Values submitted to the carriers as
well as additions and deletions of property from the Statement of Values as they occur. Based upon the
current property schedule, the estimated annual cost is $4,195,687. As of the agenda submission date, the
rate per $100 and annual premium are guaranteed not to exceed pricing. The broker and staff will
continue to pursue options to lower the cost of the program prior to the April 1, 2020 effective date.
Sufficient funds have been budgeted within Fund 516, Property and Casualty Insurance for this purchase.
The premium is net of commission.
GROWTH MANAGEMENT IMPACT: There is no growth management impact associated with this
item.
LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney, is approved as to
form and legality, and requires majority vote for approval. -JAK
RECOMMENDATION: To approve the purchase of property insurance as outlined in the Executive
Summary and authorize the County Manager or designee to complete any applications or other documents
necessary to bind coverage and services for a one-year period effective April 1, 2020.
Prepared by: Jeffrey A. Walker, CPCU, ARM, Division Director, Risk Management
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ATTACHMENT(S)
1. Collier 2020 Marketing Summary (PDF)
2. Property Renewal 4 Year Comparison Spreadsheet (PDF)
3. 2020 Collier Program Illustration (PDF)
4. Collier Property Insurance Modeling Report 4-1-20 (PDF)
5. Article Market Forecast Preparation_Q42019 (PDF)
6. Collier Catastrophe-Exposed Property Market When Disasters Strike Rates Hike (PDF)
7. Market Forecast R.T. Speciality (PDF)
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COLLIER COUNTY
Board of County Commissioners
Item Number: 16.E.1
Doc ID: 11877
Item Summary: Recommendation to approve the purchase of Property Insurance effective April
1, 2020 in the estimated amount of $4,195,687.
Meeting Date: 03/24/2020
Prepared by:
Title: – Risk Management
Name: Carleton Case
03/03/2020 2:38 PM
Submitted by:
Title: Division Director - Risk Management – Risk Management
Name: Jeff Walker
03/03/2020 2:38 PM
Approved By:
Review:
Risk Management Jeff Walker Additional Reviewer Completed 03/03/2020 4:20 PM
Administrative Services Department Paula Brethauer Level 1 Division Reviewer Completed 03/04/2020 2:31 PM
Administrative Services Department Len Price Level 2 Division Administrator Review Completed 03/09/2020 11:35 AM
Office of Management and Budget Debra Windsor Level 3 OMB Gatekeeper Review Completed 03/09/2020 3:41 PM
Office of Management and Budget Laura Wells Additional Reviewer Completed 03/09/2020 5:18 PM
County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 03/10/2020 3:30 PM
County Manager's Office Nick Casalanguida Level 4 County Manager Review Completed 03/14/2020 1:48 PM
Board of County Commissioners MaryJo Brock Meeting Pending 03/24/2020 9:00 AM
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Market Response
ACE (Chubb)Offered 30% Rate increase with no wind cap on the renewal - Did not use
AmRisc Companies Declined - based on scope of current form & Irma loss history. Indication is well above $7,000,000 annual premium.
Allied World Declined due to deductible cap and target pricing based on modeling
Arch Specialty Quoted in the $25,000,000 primary
Arrowhead Declined - attachment point would need to be well in excess of $75M
Aspen Specialty Quoted in the $25,000,000 x $50,000,000 layer
Ategrity Declined - can not include Flood coverage
Axis Surplus Declined - pricing would be 200% more than your targets for all layers
Berkshire Hathaway Declined - modeling results are too high
Brit Quoted in the $25,000,000 x $50,000,000 layer
Catalytic Declined - can not do the form nor include the deductible cap
Colony Group Declined - still can not get close to your pricing based on the modeling results
Crum & Forster Declined - we are not able to compete with your pricing.
Endurance Quoted in the $25,000,000 x $50,000,000 layer
Markel Quoted in the $25,000,000 x $50,000,000 layer
Everest Declined - due to modeling would only be able to provide a small limit in the 25M x 50M and would need close to 1.5M
General Star Declined - would not be able to provide the flood or quake coverage or the form
Global Excess Partners Declined - Not looking to increase our footprint in Florida
Hallmark Declined - modeling results use up too much FL aggregate
Hiscox Declined - pricing is just too thin based on the modeling results
Ironshore Declined - would need more than 3 times the target for the 25 x 50 layer
James River Declined - can not quote with a flat named storm deductible in Florida of only .5%
JEM Declined - would need more than 1.5M for the 25 x 25 layer
Kemah Declined - coming in way higher on the 25M primary due to modeling results
Kinsale Declined - due to $5M deductible cap
Lexington Declined - needs more than double the pricing for the 25M or 50M
Maxum Declined - more than 5 times your target pricing for the $25M xs $50M layer.
Mitsui Declined - would need to be well in excess of $75M attachment point
OneBeacon Declined - too much concentration in FL
Price Forbes Quoted in the $50,000,000 primary
Rivington Declined - Have a total insured value cap of $500M
RLI Declined - Total Insured Value too large
RSUI (Landmark American)Quoted in the $75,000,000 stretch layer
Scottsdale Declined - pricing came back way higher than your target.
Starr Companies No Response
Swiss Re Declined - can not get anywhere near the target pricing
Zurich Declined - Cannot include NWS deductible being capped at .5% of the TIV
Collier County, Florida - 2020 - Marketing Summary
16.E.1.a
Packet Pg. 657 Attachment: Collier 2020 Marketing Summary (11877 : Approve the purchase of Property Insurance)
Collier County Property Insurance Renewal
Four Year Comparison
Collier County Property Insurance Renewal 2017-2018 2018-2019 2019-2020 2020-2021
Real and Personal Property
Per Occurrence Loss Limit $75,000,000 $75,000,000 $75,000,000 $75,000,000
Total Insured Values $916,136,005 $962,469,096 $985,357,465 $1,003,970,388
Real Property $820,706,573 $863,070,019 $883,861,375 $887,422,998
Personal Property $41,795,603 $36,761,148 $37,073,548 $38,822,022
Property In the Open $47,334,769 $56,355,769 $58,000,757 $70,993,057
EDP Equipment, Software $4,047,260 $4,030,360 $4,074,460 $4,240,510
Business Income $2,251,800 $2,251,800 $2,347,325 $2,391,800
Builders Risk Included Included Included Included
Watercraft Included Included Included Included
Sings, Signals, Roadway Lighting Included Included Included Included
Well Head Equipment Included Included Included Included
Landfill Caps Included Included Included Included
Leased Locations Included Included Included Included
Fule Tanks and Contents Included Included Included Included
Foundations and Underground Piping Included Included Included Included
Retaining Walls Included Included Included Included
Property in the Care Custody and Control Included Included Included Included
Improvements and Betterments Included Included Included Included
Contingent Time Element Included Included Included Included
Leashold Interest Included Included Included Included
Voting Machines Included Included Included Included
Dock and Piers Included Included Included Included
Expiditing Expenses Included Included Included Included
Fences, Site Lighting, Pavers and Walkways Included Included Included Included
Boardwalks, Irrigation Systems Included Included Included Included
Sublimits
Flood (Annual Aggregate)$75,000,000 $75,000,000 $75,000,000 $75,000,000
Earthquake (Annual Aggregate) $75,000,000 $75,000,000 $75,000,000 $75,000,000
1
16.E.1.b
Packet Pg. 658 Attachment: Property Renewal 4 Year Comparison Spreadsheet (11877 : Approve the purchase of
Collier County Property Insurance Renewal
Four Year Comparison
Extra Expense $25,000,000 $25,000,000 $25,000,000 $25,000,000
Newly Acquired Property $50,000,000 $50,000,000 $50,000,000 $50,000,000
Accounts Receivable $25,000,000 $25,000,000 $25,000,000 $25,000,000
Service Interruption $25,000,000 $25,000,000 $25,000,000 $25,000,000
Errors or Omissions in Reporting $10,000,000 $10,000,000 $10,000,000 $10,000,000
Ordinance or Law
Undamaged Portion Included Included Included Included
Demolition & Increased Cost $50,000,000 $50,000,000 $50,000,000 $50,000,000
Miscellaneous Unnamed Locations $5,000,000 $5,000,000 $5,000,000 $5,000,000
Mobile Equipment $5,000,000 $5,000,000 $5,000,000 $5,000,000
Transit $2,500,000 $2,500,000 $2,500,000 $2,500,000
Pollutant Cleanup/Removal $500,000 $500,000 $500,000 $500,000
Roadways, Pavements, Driveways $1,000,000 $1,000,000 $1,000,000 $1,000,000
Spoilage $1,000,000 $1,000,000 $1,000,000 $1,000,000
Valuable Papers and Records $25,000,000 $25,000,000 $25,000,000 $25,000,000
Fine Arts $1,000,000 $1,000,000 $1,000,000 $1,000,000
Personal Property of Employees $500,000 $500,000 $500,000 $500,000
Plants, Trees and Shrubs - $5,000 Max Per Item $2,500,000 $2,500,000 $2,500,000 $2,500,000
Debris Removal 25% of Loss 25% of Loss 25% of Loss 25% of Loss
Debris Removal Additional Limit - including debris removal $10,000,000 $10,000,000 $10,000,000 $10,000,000
from County owned roadways and medians
Civil Authority $5,000,000 $5,000,000 $5,000,000 $5,000,000
Civil Authority Time Limit 30 Days 30 Days 30 Days 30 Days
Ingress / Egress $5,000,000 $5,000,000 $5,000,000 $5,000,000
Ingress / Egress Time Limit 30 Days 30 Days 30 Days 30 Days
Professional Fees $250,000 $250,000 $250,000 $250,000
Rents $500,000 $500,000 $500,000 $500,000
Temporay Removal of Property $500,000 $500,000 $500,000 $500,000
Extended Period of Liability 120 Days 120 Days 120 Days 120 Days
Royalties $5,000,000 $5,000,000 $5,000,000 $5,000,000
Mold, Mildew & Fungus and Microoragnism (Aggregate)$2,500,000 $2,500,000 $2,500,000 $2,500,000
Vehicle Physical Damage $7,500,000 $7,500,000 $7,500,000 $7,500,000
2
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Packet Pg. 659 Attachment: Property Renewal 4 Year Comparison Spreadsheet (11877 : Approve the purchase of
Collier County Property Insurance Renewal
Four Year Comparison
Deductibles
All Other Perils $50,000 $50,000 $50,000 $50,000
Named Storm 3%3%3%3%
Named Storm Minimum Per Occurrence $250,000 $250,000 $250,000 $250,000
Named Storm Maximum Per Occurrence $5,000,000 $5,000,000 $5,000,000 $5,000,000
Earthquake $50,000 $50,000 $50,000 $50,000
Flood Other Than A or V Zones Per Occ $50,000 $50,000 $50,000 $50,000
Flood Per Building A or V Zones $500,000 $500,000 $500,000 $500,000
Flood Per Contents A or V Zones $500,000 $500,000 $500,000 $500,000
Valuation
Real and Personal Property Replacement Cost Replacement Cost Replacement Cost Replacement Cost
Automobile Physical Damage Actual Cash Value Actual Cash Value Actual Cash Value Actual Cash Value
Mobile Equipment Replacement Cost Replacement Cost Replacement Cost Replacement Cost
Time Element Actual Loss SustainedActual Loss SustainedActual Loss SustainedActual Loss Sustained
Other Conditions
Vacany Permit Included Included Included Included
Back-Up of Sewers and Drains Included Included Included Included
Mechanical Breakdown on EDP Included Included Included Included
5% Insurable Value Margin Clause Included Included Included Included
Property Premium $2,275,302.00 $2,989,000.00 $3,486,642.00 $4,121,787.00
Property Rate 0.2480 0.3110 0.3540 0.4105
Property Rate Change 25.40%13.80%16.00%
Equipment Breakdown
Limit $50,000,000 $50,000,000 $50,000,000 $75,000,000
Business Income $2,184,300 $2,184,300 $2,184,300 $2,391,800
Extra Expense $500,000 $500,000 $500,000 $500,000
Ordinance or Law $2,500,000 $2,500,000 $2,500,000 $2,500,000
Perishable Goods $250,000 $250,000 $250,000 $250,000
Deductible $25,000 $25,000 $25,000 $25,000
3
16.E.1.b
Packet Pg. 660 Attachment: Property Renewal 4 Year Comparison Spreadsheet (11877 : Approve the purchase of
Collier County Property Insurance Renewal
Four Year Comparison
Equipment Breakdown Premium $26,497.00 $29,023.00 $27,668.00 $38,469.00
Terrorism
Limit Occurrence/Aggregate $50,000,000 $50,000,000 $50,000,000 $75,000,000
Sublimits
Inland Marine $5,000,000 $5,000,000 $5,000,000 $5,000,000
Automobile Physical Damage $7,500,000 $7,500,000 $7,500,000 $7,500,000
Deductible $50,000 $50,000 $50,000 $50,000
Terrorism Premium $28,500.00 $28,500.00 $25,000.00 $28,300.00
Hull Coverage
Limit NA NA NA $375,290
Hull Coverage Premium $7,131.00
Total Premium Based on Schedule On File At Binding $2,330,299.00 $3,046,523.00 $3,542,310.00 $4,195,687.00
Rate 0.254 0.317 0.359 0.418
16.40%
4
16.E.1.b
Packet Pg. 661 Attachment: Property Renewal 4 Year Comparison Spreadsheet (11877 : Approve the purchase of
$75MM
$50MM
$75,000,000 Loss Limit
"All risks" per Program Sublimits
Excluding TRIA
$50,000,000 Primary
Landmark - 10%
TOTAL - 10%"All Risks" per Program Sublmits
$25MM Excluding TRIA
Lloyds - 60%
TOTAL - 60%
Main Schedule
TIV (applicable per attached):$1,003,970,388
Total Property Loss Limit (AOP):$75,000,000
Named Storm Sublimit:$75,000,000
TRIA Limit: Not included
B&M Sublimit:Not included
Earthquake Sublimit:$75,000,000
Flood sublimit:$75,000,000
Property Premium:$4,121,727 0.4105
Estimated Surplus Lines Taxes:Florida Municipality - tax exempt
Total Fees or Surcharges for admitted carriers on all of the above options:are not included above
The coverage and terms being offered may not be the same or as broad as requested in your application.
This document shall not be construed to Effect or Bind coverage in any way without the expressed authority of the Carrier(s).
Florida Hurriance Surcharges and admitted carrier surcharges are not included in the total
BRIT - 12%
Collier County
Proposed Property Program Illustration
April 1, 2020 to April 1, 2021
Property Program Excluding Terrorism with 5M max named storm deductible
$25,000,000 XS $50,000,000
"All Risks" per Program Sublmits
Excluding TRIA
Lloyds -17%
Lloyds -12%
Lloyds -5%
Lloyds -5%
Evanston - 20%
Endurance - 10%
Aspen - 9%
TOTAL - 90%
$25,000,000 XS $25,000,000
"All Risks" per program sublimits
Excluding TRIA
Lloyd's - 20%
Lloyd's - 5%
Lloyd's - 5%
TOTAL - 30%
"All Risks" per program sublimits
$25,000,000 primary
DEDUCTIBLES
See quote for details
Arch - 20%
Lloyds - 10%
TOTAL - 30%
Excluding TRIA
16.E.1.c
Packet Pg. 662 Attachment: 2020 Collier Program Illustration (11877 : Approve the purchase of Property Insurance)
TIV - 991.4M 3% 250K min 5M max
Ground Up Loss Deductible Loss Gross Loss
Return Period GU OEP GU AEP CL OEP CL AEP GR OEP GR AEP
10,000 384,362,801 388,324,011 5,000,000 10,841,756 378,286,478 382,639,421
5,000 312,080,997 316,378,488 5,000,000 10,006,599 306,144,836 310,437,782
1,000 179,632,725 183,636,735 5,000,000 9,212,656 174,050,036 178,145,495
500 140,626,834 143,913,352 5,000,000 7,453,045 135,560,816 138,262,900
250 107,059,712 109,604,385 5,000,000 6,231,372 101,833,465 104,246,933
100 66,675,850 68,370,520 5,000,000 5,002,064 61,774,773 63,141,673
50 40,241,513 41,245,820 5,000,000 5,000,000 35,673,925 36,399,888
25 18,401,954 18,868,565 4,236,418 4,609,794 14,627,064 14,904,623
10 2,115,272 2,167,324 1,528,437 1,559,013 278,487 279,527
5 29,309 30,630 29,412 29,913 0 0
AAL 2,806,345 2,806,345 418,143 418,143 2,388,202 2,388,202
SD 14,949,922 14,949,922 1,221,496 1,221,496 14,161,285 14,161,285
CV 5 5 3 3 6 6
1.24.20
Key Losses - US Windstorm and Surge Analysis (USD)
16.E.1.d
Packet Pg. 663 Attachment: Collier Property Insurance Modeling Report 4-1-20 (11877 : Approve the purchase of
16.E.1.e
Packet Pg. 664 Attachment: Article Market Forecast Preparation_Q42019 (11877 : Approve the purchase of Property Insurance)
16.E.1.e
Packet Pg. 665 Attachment: Article Market Forecast Preparation_Q42019 (11877 : Approve the purchase of Property Insurance)
16.E.1.f
Packet Pg. 666 Attachment: Collier Catastrophe-Exposed Property Market When Disasters Strike Rates Hike (11877 :
16.E.1.f
Packet Pg. 667 Attachment: Collier Catastrophe-Exposed Property Market When Disasters Strike Rates Hike (11877 :
From: RT - Thorngate, Robert <REThorngate@irmsinc.com>
Sent: Wednesday, March 04, 2020 12:42 PM
To: WalkerJeff <Jeff.Walker@colliercountyfl.gov>
Cc: Carleton Case <Carleton.Case@colliercountyfl.gov>; WK - Kuhlman, William
<WHKuhlman@irmsinc.com>
Subject: RT Specialty - Property Market update from Team Pearson
Jeff,
This is an article from this past December from Ryan that is informative.
Bob
Robert E. Thorngate, CPCU, ARM
Executive Vice President
rethorngate@IRMSinc.com
Office: 239-649-1444
Fax: 239-649-7933
From: Robinson, Teresa [mailto:Teresa.Robinson@rtspecialty.com] On Behalf Of Pearson, Ryan
Sent: Monday, December 16, 2019 9:36 AM
To: Pearson, Ryan; Dress, Lindsay
Subject: Market update from Team Pearson/Dress
Hello everyone,
Based on a very busy year and even busier anticipated upcoming first quarter, I thought it was a good
time to reach back out to our clients and update you on the property market. For those of you that
received and read the state of the market report we sent a few months ago, I think you will see that the
report continues to be on target as the year unfolds. There is additional clarity on a few items that are
worth sharing at this juncture and some articles that support this are attached. I will do my best to
summarize some very complex market issues below, but the articles attached, provide further support
or detail if you wish to delve deeper:
Our observations for first quarter are as follows:
• Retrocession renewals for 1/1 are likely to impact the overall pricing in the market (retro
companies reinsure the reinsurers). Retro is headed towards hard market conditions primarily
due to recent capital events, ILS capacity lock-up (reserves), or capital moving away from our
industry in search of less volatility
• Increased rates in the retro market are passed on to reinsurers and in turn passed on to
insurance companies and our customers
• Bond investment returns remain very low so this puts additional pressure on underwriting
profitability
• Insurance Companies generally are making mild profits for 2019 with expectations that loss
creep will eventually hamper their probability for this year as well (similar to what happened in
2018)
16.E.1.g
Packet Pg. 668 Attachment: Market Forecast R.T. Speciality (11877 : Approve the purchase of Property Insurance)
• Insurance Companies will be looking to increase their own profit margins and will also be
looking to pass on higher costs related to reinsurance and retro increases (eg their expenses are
increasing so they have to pass on the rate increase they need PLUS some of their increased
costs)
• AIG and others continue to work on book “remediation” which creates pockets of property
business that are tougher to place. Admitted markets are continuing to move away from wildfire
risks, convection storm areas, flood or other cat exposures, and tougher classes of fire business
• 2-3 months ago, underwriters were working hard to underwrite accounts to technical rates with
proper cat funding, but we are seeing more accounts where they are taking an opportunistic
pricing approach with less underwriting (eg throwing a number at something to see what they
can get). Cat capacity is becoming more commoditized.
• MGUs / MGAs are disappearing. Fewer syndicates exist in London and fewer carriers in the US,
and mergers/acquisitions have further limited the pool of available carriers to place business.
Very few new carriers have entered the market, but there are a fair amount that are trying to
do so.
• The small minority of carriers or syndicates that have made money the last 2+ years will likely be
more stable, more consistent, and more agreeable to helping with new business. These carriers
will continue to be who we lean on the most, but they have limitations and will continue to be
selective as they have done so the past few years while profitably navigating a very choppy
market.
• All carriers will continue to focus on reducing attrition and exposure to dollar trading and will be
more willing to entertain attractive rates on accounts they deem have proper retentions.
In general, rate and deductible increases will continue to proliferate renewals (even loss free accounts)
while accounts that are being “remediated” or are “loss affected” will continue to get very tough
treatment from the marketplace.
As always, we believe the best approach is to try and educate our customers on the market and be
transparent about what we are seeing. We will continue to request you to get us renewal or new
submissions as early as possible as markets are very busy and lately it’s been difficult getting anyone to
look at things 30+ days out so submitting early with a plan and reasons why we need the quotes early is
pretty helpful.
Thanks for your support and please feel free to contact me or anyone else on the team with questions.
Ryan Pearson, Executive VP Lindsay M. Dress, Senior
Vice President
Property Team Leader RT Specialty - KC Team
Leader
12404 Park Central Drive, Suite 380, Dallas, TX 75251 1100 Walnut, Suite
3200, Kansas City, MO 64106
Direct: (214) 254-4685 ● Cell (816) 739-8335 Direct: (816) 412-7539 ●
Cell (816) 509-5201
ryan.pearson@rtspecialty.com ● www.rtspecialty.com
lindsay.dress@rtspecialty.com ● www.rtspecialty.com
16.E.1.g
Packet Pg. 669 Attachment: Market Forecast R.T. Speciality (11877 : Approve the purchase of Property Insurance)