Skip to Main Content

News Clips - September 12, 2023

 Back To News

News Clips - September 12, 2023

Sep 12, 2023


September 12, 2023 


Flood insurance swamps US government


Reuters, September 12, 2023


WASHINGTON, Sept 11 (Reuters Breakingviews) - The U.S. government’s flood coverage could soon find itself financially underwater. The National Flood Insurance Program, which covers nearly 5 million properties, needs to be reauthorized by Congress by the end of the month to avoid a housing crunch. Yet a straightforward renewal would only extend the program’s debt-laden decline. A larger overhaul can help balance the scheme’s books while addressing some of the country’s home-affordability problems.

Should Congress fail to reauthorize the NFIP, purchases on some 1,330 homes would either be delayed or fail to close every day due to insurance uncertainties, according to the National Association of Realtors. That squeeze would add more friction to a housing market already pressured by historically low supply and the highest mortgage rates in two decades.

Simply extending the program’s lifespan doesn’t address more existential problems. First, it owes the Treasury $21 billion. Second, the program’s average annual premium rose from $736 to $935 in the 12 months through September 2022 amid a push to make it more solvent. But, perhaps because it is more expensive, it lost 61,000 policyholders over the past year. A FEMA report seen by the Associated Press estimated another 1 million fewer Americans will buy flood insurance by the end of the decade, further starving the program of much-needed funds.




 Hard market to continue with disequilibrium in demand and supply: Swiss Re Institute


Reinsurance News, September 9, 2023


A disequilibrium in demand and supply of non-life insurance is expected to persist, and with it a continuation of current hard market conditions, especially in property catastrophe lines, according to Swiss Re Institute.

Driven by increased natural catastrophe activity as well as inflation, demand for insurance protection has risen since 2017, which is resulting in higher replacement values, analysts explain.

At the same time, a higher growth in industry capital is needed to narrow protection gaps world wide. For example, in the US, property and casualty insurance industry capital has grown by 5% annually on average for the past 10 years. During the same time, the need for nat cat protection has grown at about 7% per year on average.

Globally, the value of unprotected risk exposure has risen steadily in the past five years. Swiss Re Institute estimates the global protection gaps for natural catastrophes, crop, mortality and health insurance at $1.8 trillion in premium equivalent terms for 2022.

“Both primary insurance and reinsurance sectors contribute to closing the protection gaps. In an environment where heightened risk awareness prevails, the role of reinsurance in providing peak capacity for the primary insurance sector is becoming increasingly relevant. This is also reflected in the fact that property re/insurance – the line covering the largest part of natural catastrophes – has seen premium volume growth of 4.3% in primary insurance and 5.9% in reinsurance over the last decade,” analysts stated.



Reinsurers press for more rate hikes


Business Insurance, September 11, 2023


MONTE CARLO, Monaco – The world’s largest reinsurers plan to push through further rate hikes at year-end reinsurance renewals, building on the significant increases they imposed on cedents at renewals earlier this year.

While the Jan. 1, 2024, renewal price increases likely won’t be as severe as Jan. 1, 2023, renewals, continued large catastrophe losses and inflation will drive prices higher, they said during presentations at the Rendez-Vous de Septembre reinsurance meeting this week in Monte Carlo, Monaco.

The meeting marks the traditional start of the reinsurance renewals season, with much of the focus on property reinsurance pricing. The four largest European reinsurers – Munich Reinsurance Co., Swiss Reinsurance Co. Ltd., Hannover Re SE and Scor SE – all gave presentations during the meeting of their view on the market. 

Despite significant price increases at year-end 2022 and during mid-year 2023 renewals, rates will likely rise again at year-end, said Jean Paul Conoscente, New York-based CEO of global property/casualty at French reinsurer Scor.

“Last year, the price increases on property cat were around 40% to 50% year-on-year. We don't expect increases of that magnitude at all this year, but still likely double-digit — probably call it low double-digit,” he said.


Visit our Website

Cincinnati Insurance Board | 513-533-1200 |

Facebook  Twitter  Linkedin  
loading gif