Fortunately, most property claims submitted by Oregon’s cities or counties are relatively small and within CIS’ self-insured retention. However, for large or catastrophic claims, we must protect the financial health of your not-for-profit risk pool by purchasing reinsurance. In 2022, we partnered with over 20 reinsurers worldwide to protect Oregon cities and counties and provide the best coverage for the best value.
“No one carrier will accept these catastrophic risks alone,” said CIS Executive Director Patrick Priest. “So, we work with our brokers to piece together a patchwork of companies to back the CIS property program.”
To build this trust — and secure competitive rates — every year, Patrick and CIS’ underwriting staff meet with many reinsurers to tell the CIS story — and explain why reinsurers should invest in us. Fortunately, we have a very good story to tell. With the many risk-management activities you’re doing — as well as the favorable laws and mild weather we enjoy here in Oregon — CIS looks appealing to reinsurers.
Reinsurance is a global market, and CIS places property coverage both domestically and with Lloyd’s of London. As the world’s leading market for specialized insurance, Lloyd’s has organized into syndicates that underwrite specialized risks. For over ten years, CIS has utilized various Lloyd’s syndicates in our mix of property reinsurance coverage. Lloyd’s values the personal relationships they’ve developed with us over time. They also appreciate that Oregon is not exposed to hurricane risks, which is something that has severely impacted their industry.
In the Fall of 2022, Hurricane Ian led to catastrophic claims, causing the property reinsurance market to lose money. Because of this, reinsurers are having difficulty obtaining their own financial backing (called retrocessionaires).
Experts point to missed earnings targets in recent years as evidence that the industry is in a hard market. This means that reinsurers have greater bargaining power and can push for higher premiums and restructure terms to their advantage, such as limiting coverage for certain risks or demanded higher retentions (deductibles).
Even though Oregon may not have experienced property events as devastating as Hurricane Ian, the global reinsurance market needs to raise rates to maintain its own financial position.
The good news, however, is that CIS has been successful securing the much-needed reinsurance with strong financial partners.
And it’s not just property coverage that relies on reinsurance to support the limits that Oregon’s cities and counties need. For liability, CIS self-insurers the first $1 million of coverage but utilizes reinsurers to back up to $20 million in limits. CIS self-insures $250,000 of cyber claims and offers an optional reinsured tier of coverage with limits up to $1.25 million.
As we move forward in the new year, we appreciate how our members place trust in us. At CIS, we believe members and partners are a lot like family. We also build close relationships with reinsurance partners based in trust. Together, we provide the strong financial backing to pay large settlements, jury awards, and catastrophic claims when they occur. With our reinsurers’ help, we can always be there when you need us most because that’s what families do.