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A looming round of reinsurance renewals could signal slowdown in premium increases, The Wall Street Journal reports.
An increase in the costs of reinsurance policies are one leading, but rarely discussed, cause of the current home insurance coverage crunch impacting several markets across the nation, including Louisiana.
As the Wall Street Journal writes, another round of reinsurance renewals currently under way in Florida and elsewhere will help determine whether more premium increases are in store for homeowners.
After suffering a sharp drop in profits last year, reinsurers raised rates and cut coverage at the start of last year, which hit home insurers, making it harder to manage their losses from storms and other extreme-weather events.
Home insurers are hiking rates and pulling back from disaster-prone areas, such as Louisiana. Since the start of last year, regulators have greenlighted a 26% home-insurance rate increase in Texas, one of 45 states to suffer a double-digit increase, according to an analysis by S&P Global Market Intelligence for The Wall Street Journal.
