8 The impacts on property insurance buyers Elevated losses are not limited to have experienced a market exodus due developed. It’s just one of many solutions what has previously been regarded to poor loss experience and continued to assist organizations manage through as the obvious catastrophic-exposed pressure from reinsurers to exit or the hard market. geographies such as Florida, Louisiana, rebalance their portfolios. There is a In summary, there is far less 昀氀exibility, Texas, and California. They have crept striking de昀椀ciency of admitted markets let alone adaptability and optionality in into the Midwest, Northeast, and other for wood frame apartments with 13R the property marketplace as it stands states as well. According to AccuWeather, suppression systems (a residential today. Reinsurance will be in sharp the damage from the 昀氀ooding in sprinkler design standard focused on focus throughout 2023 and insureds California is estimated at between $30 low-rise residential occupancies). should be prepared for more restrictive and $34 billion, encompassing both Builder’s risk coverage is another area property appetites and continued insured and uninsured property. under pressure because of climate upwards cost pressure, which is directly We have continued to witness a market implications such as wind, 昀氀ood, linked with increasing reinsurance treaty costs and in昀氀ation. Work closely with retraction from certain occupancy drought, and wild昀椀re. Coupled with classes. Habitational, senior living, food in昀氀ation, these concerns are driving MMA to uncover untapped capacity and beverage, mining, metals, wood signi昀椀cant increases in insurable values. including alternative, structured risk, and products, chemical, energy, heavy Ask your MMA representative about our parametric solutions, which can often manufacturing, and other technical risks proprietary builder’s risk panel that we mitigate these challenges. The reinsurance view from Guy Carpenter Overall, tepid reinsurer appetite and renewals were di昀昀erentiated by treaty experience in this bifurcated market. For the property catastrophe market, this was the greatest upwards shift in market pricing and contract terms seen in decades. Mercifully, a market-wide shortfall of capacity for January 1 renewals failed to materialize, with most clients securing their target orders. Demand for additional limit was tempered by price increases and concerns regarding market capacity. To reduce exposure to market hardening, insureds also reduced target limits, increased retentions, split bottom layers and/ or accepted reduced coverage. There was also de昀椀nitive pressure to reduce occurrence limits for critical catastrophic perils. The structural changes to property catastrophic programs were signi昀椀cant with 70% of North American insurers forced to take signi昀椀cant retention increases, with the median increase at 60%.