Relational urban geographies of re/insurance 147
(Medders et al. 2013; Taylor 2020). These pivot around the complexities of
maintaining an underwriting regime that is reliable and profitable, while
also sufficiently affordable to property market consumers – and therefore
‘resilient’ enough to sustain the state’s real estate-based political economy
(Taylor & Weinkle 2020). Questions of how to actuarially model and price
potential catastrophe hurricane wind losses, to capitalise this risk and
transfer it from insurers to reinsurers and broader capital market investors, and to appropriately regulate such practices to serve broader societal
goals have informed debates and innovations in the re/insurance sector in
the three decades since Hurricane Andrew’s landfall near Miami (Medders
et al. 2013; Taylor & Weinkle 2020).
ILS products were introduced and eventually widely adopted in Florida
and beyond in response to such questions. One senior re/insurance investor estimated that half of all ILS are exposed to Florida hurricane risk,
for example (Seo 2015). Between March 2017 and June 2020, Florida residential insurers channelled millions of dollars in policyholder premiums
to raise $6.2 billion of reinsurance protection through 33 public ILS issuances (Table 11.1). This count does not include ILS transactions sponsored
by reinsurers transferring their Florida risk exposure nor does it include
privately placed collateralised reinsurance, and therefore represents only a
portion of ILS-related activity in the state.
Table 11.1 Florida insurer direct ILS issuance (March 2017–June 2020).
Florida insurer
ILS issuances
ILS cover
(cumulative, millions)
Citizens Property Insurance Corporation
4
$685.0
Heritage Property and Casualty Insurance Co.
2
$160.0
Safepoint Insurance Company
2
$240.0
Southern Oak Insurance Company
2
$99.2
Avatar Property and Casualty Insurance
Company
2
$165.0
Castle Key Insurance & Castle Key Indemnity
2
$400.0
USAA
8
$2,040.0
Security First Insurance Company
2
$275.0
American Integrity Insurance Company via
Hannover Rück SE (Germany)
4
$489.0
American Strategic Insurance Group
1
$200.0
Nationwide Mutual
3
$1,315.0
State National Insurance Co via Markel
Bermuda Ltd
1
$100.0
Notes: Bonds with exclusive Florida exposure and mixed US multiple peril exposure (including
named storm) were included. While many of these firms are mostly or entirely specialised
in Florida underwriting (e.g. Citizens), some (e.g. USAA, Nationwide) are large national
insurers with diversified portfolios and catastrophe risk exposures.
Source: Artemis.bm Deal Database.
(Medders et al. 2013; Taylor 2020). These pivot around the complexities of
maintaining an underwriting regime that is reliable and profitable, while
also sufficiently affordable to property market consumers – and therefore
‘resilient’ enough to sustain the state’s real estate-based political economy
(Taylor & Weinkle 2020). Questions of how to actuarially model and price
potential catastrophe hurricane wind losses, to capitalise this risk and
transfer it from insurers to reinsurers and broader capital market investors, and to appropriately regulate such practices to serve broader societal
goals have informed debates and innovations in the re/insurance sector in
the three decades since Hurricane Andrew’s landfall near Miami (Medders
et al. 2013; Taylor & Weinkle 2020).
ILS products were introduced and eventually widely adopted in Florida
and beyond in response to such questions. One senior re/insurance investor estimated that half of all ILS are exposed to Florida hurricane risk,
for example (Seo 2015). Between March 2017 and June 2020, Florida residential insurers channelled millions of dollars in policyholder premiums
to raise $6.2 billion of reinsurance protection through 33 public ILS issuances (Table 11.1). This count does not include ILS transactions sponsored
by reinsurers transferring their Florida risk exposure nor does it include
privately placed collateralised reinsurance, and therefore represents only a
portion of ILS-related activity in the state.
Table 11.1 Florida insurer direct ILS issuance (March 2017–June 2020).
Florida insurer
ILS issuances
ILS cover
(cumulative, millions)
Citizens Property Insurance Corporation
4
$685.0
Heritage Property and Casualty Insurance Co.
2
$160.0
Safepoint Insurance Company
2
$240.0
Southern Oak Insurance Company
2
$99.2
Avatar Property and Casualty Insurance
Company
2
$165.0
Castle Key Insurance & Castle Key Indemnity
2
$400.0
USAA
8
$2,040.0
Security First Insurance Company
2
$275.0
American Integrity Insurance Company via
Hannover Rück SE (Germany)
4
$489.0
American Strategic Insurance Group
1
$200.0
Nationwide Mutual
3
$1,315.0
State National Insurance Co via Markel
Bermuda Ltd
1
$100.0
Notes: Bonds with exclusive Florida exposure and mixed US multiple peril exposure (including
named storm) were included. While many of these firms are mostly or entirely specialised
in Florida underwriting (e.g. Citizens), some (e.g. USAA, Nationwide) are large national
insurers with diversified portfolios and catastrophe risk exposures.
Source: Artemis.bm Deal Database.