NU Online News Service, Jan. 31, 11:23 a.m. EST
Officials with the Mississippi Windstorm Underwriting Association are in London this week looking for reinsurance deals.
The association, also known as the wind pool, is the insurer of last resort for coastal property owners who are unable to obtain coverage in the open insurance market.
Reinsurance – essentially, insurance for insurers – protects the board from debilitating claims, such as 2005's Hurricane Katrina. It also helps hold premiums down.
Wind pool board member Mark Cumbest tells the Mississippi Press (http://bit.ly/xxfcC6) that the association sends its board members on trips each year to meet with the reinsurance market's major players, who are concentrated in London and Bermuda.
The wind pool covers about 46,000 residences in Jackson, Harrison, Hancock, George, Stone and Pearl River counties.
“The cost of reinsurance is the major expense of the wind pool in a non-storm year,” said Cumbest, who owns Cumbest Realty in Jackson County. “It is the major driver of the cost of insurance for wind pool customers.”
For the 2011 storm season, the wind pool purchased $815 million in reinsurance for $69 million. In 2010, the board paid the same amount for $750 million in reinsurance.
“Last year we were able to purchase more reinsurance than the year before for the same money,” Cumbest said. “Pricing will be very important this year. We will make our best effort to provide the information they need in order to get the best pricing and coverage possible.”
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