June 2nd, 2011

Florida Reinsurance Renewal June 1, 2011: Figure 3: Comparison of 2010 and 2011 Florida Risk Adjusted Pricing Using RMS v9

Posted at 7:57 AM ET

Figure 3: Comparison of 2010 and 2011 Florida Risk Adjusted Pricing Using RMS v9

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There are several ways to compare price change between years while removing the impact of a company’s increase or decrease in exposure. In order to provide a consistent view of price change, Figure 3 compares the ROL (the amount charged) with the loss on line (LOL, the amount of risk) using RMS v9 for both 2010 and 2011 to calculate the amount of risk. This analysis does not take into account any increase in the perceived amount of risk from AIR v12 or RMS v11. Across all programs, the change indicated is up 5 percent to up 10 percent. Upper layers experienced more pressure on pricing and evidenced the largest average increases, whereas the indicated increase in the lower layers was less significant.

Source: Guy Carpenter & Company, LLC

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