The St. Petersburg Times, quoting a letter from Auto-Owners Insurance to its agents on its plans to continue its exposure reduction in Florida:
“We cannot rely on purchasing hurricane reinsurance from any organization that is financially unreliable,” the letter reads. “The new law also requires companies to reduce rates, as if additional reinsurance was purchased from the (CAT Fund). This is simply a rate roll back.”
You know, there are accounting restrictions on insurers when reinsurance of questionable collectibility is being considered in the financials. That does in turn raise a headache in cat management planning, which in turn has an impact on pricing.
So, what grade paper is the Florida cat fund offering?