California wildfire risk spurs new excess products, cat bonds
The products, which were designed to complement a self-insured retention plan, were written in partnership with an AM Best.
California is home to the largest number of properties at extreme wildfire risk in the United States.
Amwins’ excess wildfire products were developed for high-value residential properties, including tenant-occupied and vacation rentals, that are not eligible for primary insurance.
The single-peril product is specific to wildfire loss. The multi-peril product provides fire, including wildfire, and extended coverages consistent with the California FAIR (and similar) plans up to a dwelling replacement cost of $10 million.
Scott Sauter, personal lines practice leader for Amwins Access, said: “A decade of wildfire losses in California created the perfect storm for exposed, high-value residential properties.”
“Along with the capacity challenges, the situation makes the process of placing coverage more complex, leaving insureds vulnerable to last-minute cancellations and outsized losses.”
David Lavins, president of Amwins Access, said: “Our strategy at Amwins Access is two-fold: first, to deliver profitable results and best-in-class distribution for our market partners; and second, to problem-solve on behalf of our retail agent partners and build innovative products around their needs.”
“That focus, in addition to months of productive collaboration with our market partners, contributed to a successful launch of excess wildfire products in California.”
In other California wildfire risk news, Aon’s private catastrophe bond issuance and placement platform Randolph Re has completed a $25 million Randolph Re (Series 2022-1) private cat bond deal, the third from the issuer and expectedly again for California headquartered property casualty insurer Mercury Insurance.
Mercury Insurance is a P&C specialist underwriter that insures a large portfolio of property risk in wildfire exposed parts of California and has been utilising the ILS market for reinsurance for some years now, culminating in the use of Aon’s Randolph Re issuance platform to secure its protection through private cat bonds.