Relational urban geographies of re/insurance 145
geographies are central to the assembly and extension of re/insurance markets. Florida and Singapore play crucial roles in constituting catastrophe re/
insurance markets (as a source of insured wind risk, or as a centre for brokering such risk, respectively). Yet as the chapter explores, so too do actors operating in each context seek to cultivate re/insurance in order to hedge against
broader, yet distinctive political and economic ‘headwinds,’ ranging from an
uncertain future for risky coastal real estate in Florida, to anxieties about
regional competition and stability in Singapore. The chapter underscores
how these interwoven, if asymmetrical set of relations shape and extend re/
insurance as a powerful modality for governing climate uncertainties. Second,
the chapter aims to encourage further relational analysis of the intra- and
inter-geographical dynamics which shape the scope and significance of re/
insurance geographies. Three analytical focal points – (i) circulations of tools
and techniques, (ii) risk capital flows, and (iii) shifting state engagement – are
proposed and explored in conversation with the case to advance relational re/
insurance analysis.
Following this introduction, the chapter charts the evolution of ILS
within and between Florida and Singapore. In turn, the chapter draws on
insights from the case to develop the three aforementioned focal points
for the relational study of re/insurance market change. The chapter draws
on fieldwork conducted in Florida and Singapore between 2016 and 2019,
including elite interviews with re/insurance executives and other market
stakeholders, public policy and financial statement analyses, and in-person
and virtual participation at major industry conferences and events, including RMS Exceedance (2016), the Singapore Reinsurance Conference (2019),
and Artemis ILS Asia Conference (2020).
Florida: Underwriting urban fortunes
Re/insurers often characterise Florida as the ‘peakest’ of ‘peak peril’ property catastrophe underwriting, due to the exceptional concentration of
insured hurricane wind exposure in the state. Swiss Re estimates that a single
major-category hurricane 3 landfall in Miami could generate insured losses
of up to $180 billion, and economic damages far greater, representing losses
of ‘a magnitude not yet observed’ by the industry, for example (Schwartz &
Linkin 2017). To manage this risk, re/insurers collect substantial volumes of
policyholder premiums from millions of Florida policyholders every year. In
2018, Florida retail insurers directly collected more than $10 billion in annual
premiums, underwriting over $2 trillion of statewide residential exposure
(Florida Office of Insurance Regulation. n.d.). Florida insurers cede a large
proportion of this premium to dozens of catastrophe reinsurers in Bermuda,
the United Kingdom, Germany, and beyond, which agree to finance a share
of the insurer’s catastrophe risk exposure. Taylor (2020) finds that an important subset of Florida residential insurers spent just over half of every consumer premium dollar earned on reinsurance in 2015, for example.
geographies are central to the assembly and extension of re/insurance markets. Florida and Singapore play crucial roles in constituting catastrophe re/
insurance markets (as a source of insured wind risk, or as a centre for brokering such risk, respectively). Yet as the chapter explores, so too do actors operating in each context seek to cultivate re/insurance in order to hedge against
broader, yet distinctive political and economic ‘headwinds,’ ranging from an
uncertain future for risky coastal real estate in Florida, to anxieties about
regional competition and stability in Singapore. The chapter underscores
how these interwoven, if asymmetrical set of relations shape and extend re/
insurance as a powerful modality for governing climate uncertainties. Second,
the chapter aims to encourage further relational analysis of the intra- and
inter-geographical dynamics which shape the scope and significance of re/
insurance geographies. Three analytical focal points – (i) circulations of tools
and techniques, (ii) risk capital flows, and (iii) shifting state engagement – are
proposed and explored in conversation with the case to advance relational re/
insurance analysis.
Following this introduction, the chapter charts the evolution of ILS
within and between Florida and Singapore. In turn, the chapter draws on
insights from the case to develop the three aforementioned focal points
for the relational study of re/insurance market change. The chapter draws
on fieldwork conducted in Florida and Singapore between 2016 and 2019,
including elite interviews with re/insurance executives and other market
stakeholders, public policy and financial statement analyses, and in-person
and virtual participation at major industry conferences and events, including RMS Exceedance (2016), the Singapore Reinsurance Conference (2019),
and Artemis ILS Asia Conference (2020).
Florida: Underwriting urban fortunes
Re/insurers often characterise Florida as the ‘peakest’ of ‘peak peril’ property catastrophe underwriting, due to the exceptional concentration of
insured hurricane wind exposure in the state. Swiss Re estimates that a single
major-category hurricane 3 landfall in Miami could generate insured losses
of up to $180 billion, and economic damages far greater, representing losses
of ‘a magnitude not yet observed’ by the industry, for example (Schwartz &
Linkin 2017). To manage this risk, re/insurers collect substantial volumes of
policyholder premiums from millions of Florida policyholders every year. In
2018, Florida retail insurers directly collected more than $10 billion in annual
premiums, underwriting over $2 trillion of statewide residential exposure
(Florida Office of Insurance Regulation. n.d.). Florida insurers cede a large
proportion of this premium to dozens of catastrophe reinsurers in Bermuda,
the United Kingdom, Germany, and beyond, which agree to finance a share
of the insurer’s catastrophe risk exposure. Taylor (2020) finds that an important subset of Florida residential insurers spent just over half of every consumer premium dollar earned on reinsurance in 2015, for example.