Reinsurance Wrap Up | May 28, 2016

Reinsurance Wrap Up
Reinsurance Wrap Up

Top reinsurance news stories this week:

Citizens of Florida Changes Risk Transfer Buying Strategy

In an article posted by Steve Evans on Seeking Alpha, he writes about how Citizen’s Floriday is changing the way they are buying reinsurance for the 2017 hurricane season.

The shift in coverage is moving from aggregate to per-occurrence. Steve says:

“It’s a fairly significant change in reinsurance strategy for Citizens this year . . . But the shift does make sense, providing greater protection for the biggest events, while perhaps making better use of the cat bond aggregate protection for multiple smaller events.”

His article includes two graphics, one showing the 2015 protection and the planned coverage for 2016. I have copied them below.

2015 Citizens Risk Transfer Structure

The reinsurance structure for Citizens Ins. in 2015

2016 Citizens Risk Transfer Structure

Citizens Florida 2016 Risk Transfer

New CEO at General Re

Ajit Jain, Berkshire Hathaway (AP Photo/Nati Harnik)
Ajit Jain, Berkshire Hathaway (AP Photo/Nati Harnik)

On Friday, May 20, Berkshire Hathaway issued a press release announcing that Kara Raiguel, a 15+ year veteran in Ajit Jain’s reinsurance unit was named the new CEO of General Re, headquartered in Stamford, CT.

According to my sources, Warren Buffett has been setting up key executives to run his main businesses. He has one or two guys running his investments, one running the railroad, etc. Mr. Buffett has tapped Ajit Jain as his reinsurance guy, and I expect that Ajit was given free reign to name the new CEO.

It will be interesting to see whether there will be significant changes to the Gen Re culture going forward.

I’ve know Kara for a number of years and done business with her. She’s a class act, and I wish her the best.

First Named Storm of 2016: Tropical Storm BonnieĀ 

Fresh off of releasing their 2016 tropical storm outlook for the 2016 hurricane season, we have our first named storm heading towards the southeast US coastline. It’s a

Tropical Storm Bonnie - NOAA
Tropical Storm Bonnie – NOAA

relatively weak storm, with maximum sustained winds of 40 mph on Sunday morning. It will mainly be a heavy rain event, making landfall in the Carolinas and bringing heavy rain up the eastern seaboard just in time to finish the Memorial Day Weekend festivities.