Hurricane Preparedness Week (May 15-21) has flown by. It’s a good time—especially for coastal residents—to think about how to prepare for a land-falling tropical storm or hurricane. For insurance carriers, the week is also a good time to prepare for and evaluate their exposure, since the majority of reinsurance catastrophe covers are up for renewal July 1. Now is the time to plan.
Re/insurance companies continue to benefit from a flow of new capital primarily driven by investments in insurance-linked securities (ILS), sidecars, hedge fund-backed reinsurance companies and collateralized reinsurance vehicles, chiefly by means of catastrophe bonds issuance.
Insurance industry veterans know that accounting staff responsible for preparing a carrier’s annual statement draw a sigh of relief after March 1, the deadline for filing. Many of them face a year-end crunch of manually assembling information from different places, systems, and spreadsheets. There’s also a scramble to secure Schedule F funding, in forms of letters of credit, trust fund and other collateral. The scramble for reducing or eliminating the Schedule F penalty is paramount.