Reinsurance claims harder to collect

The Daily Business Review is reporting that the eathquake and tsunami in Japan and other catastrophic events around the world could make reinsurance harder to collect if a hurricane hits Florida. Credit rating agency Fitch reported that natural disasters around the world have raised questions about the capital adequacy of reinsurance companies, which bear much of Florida's insured risk for windstorm damage. Reinsurance companies could try to offset the cost of surging disaster claims abroad by raising premiums, but their pricing power may be limited. Some leaders of reinsurance companies have been alluding to the possibility of double-digit pricing improvement on U.S. wind exposures for which many treaty renewals will be renegotiated. But expectations of dramatically improved pricing conditions in the reinsurance market may be overstated. Michael H. Braun, president and chief executive officer of 21st Century Holding Co. which insures homes in South Florida and other markets has stated that there is more than enough underwriting capacity in the market for reinsurance. He states that with the earthquake in Japan and other events worldwide, reinsurers have become more firm on their pricing. However, Braun also stated his belief is that pricing will remain flat. If you would like to comment on this story or write to me, you may reach me via LinkedIn at

http://www.linkedin.com/in/michelleoterovaldes or via email at miamipandi@comcast.net.

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