The Cayman Islands Insurance Association (CIIA) has cautioned residents of the Cayman Islands that they should anticipate increases in their property insurance premium rates in 2023.
Faced with the rising cost of reinsurance, local insurers will need to raise their rates, the association said.
After most local insurers have now gone through their reinsurance renewal process, “these increases are likely to be between 15% to 30% dependent on various factors such as type of construction, property protections, property location and elevation.”
At the same time property insurance capacity will be reduced, CIIA warned, saying that many insurers will be effectively rationing the coverage offered.
“All local insurers will be in the same situation – increased rates and reduced capacity,” the insurance association said in a press release.
For insurance consumers, this means rates increases on all types of insurance along with reduced coverage availability.
“To help with personal insurance costs it is recommended to speak with your local representative to discuss increasing deductibles and ensuring you have all discounts you are eligible for,” CIIA said.
Reinsurance costs up globally
The war in Ukraine, high inflation and extreme weather has pushed up the cost of reinsurance overall in January renewals, according to a report by Gallagher Re.
The report described the most recent renegotiation of reinsurance rates, which took effect on 1 Jan., as the most challenging, complex and frustrating in years.
“For property risk renewals there has been less regional differentiation and a more uniform approach adopted by reinsurers seeking to improve their returns on a globally underperforming class of business.”
Because property has suffered from underperformance for several years, some reinsurers are reducing capacity or have pulled out altogether.
For the US property market, which saw large scale damage from Hurricane Ian in Florida and South Caroline last year, reinsurance rates were higher by 45% to 100% for loss-hit policies, Gallagher Re’s figures showed.
Broker Howden said in a separate analysis the cost of property reinsurance rose by 37% globally in January renewals, compared with 9% last year. It was the biggest jump since 1992.
Related Videos
