Mississippi’s insurer of last resort has bought $815 million in reinsurance for the coming storm season.
The Mississippi Windstorm Underwriting Association isn’t releasing the exact cost to protect future negotiations with reinsurers, but paid $65 million to $75 million for the coverage, Jackson County board member Mark Cumbest told The Mississippi Press.
“We obtained the best rate possible,” said Cumbest, one of four reinsurance committee members who traveled to London in January to seek lower rates.
The wind pool covers about 41,000 coastal Mississippi property owners who cannot buy coverage in the open market.
Last year, the board said it paid $69 million for $815 million of coverage. In 2010, it paid $69 million for $750 million in coverage.
Board members travel to London and Bermuda each year to work with the market’s major players and answer questions about the Mississippi coast’s building codes, general economy and progress since Katrina, among other topics.
Reinsurers also consider worldwide catastrophes — tsunamis, volcanoes, hurricanes, earthquakes, etc. — when setting rates.
“Although the cost of reinsurance has increased due to global market conditions, we have found that it is important to maintain these relationships with the reinsurers in order to help keep our cost of reinsurance down as much as possible,” Cumbest said.
“The more comfortable they feel that we are managing the wind pool program properly, the more inclined they are to work with us on the rates,” he said. “For 2012, we are self-insuring $20 million more than we did last year.”