Wind Pool board heads overseas for low reinsurance rates
Published: January 30,2012
MISSISSIPPI GULF COAST — Members of Mississippi’s wind pool board are in London this week to seek low reinsurance rates — a key factor in the cost of policyholders’ premiums.
The Mississippi Press reports that the board left Saturday and are expected to return Friday.
The Mississippi Windstorm Underwriting Association is the insurer of last resort for coastal property owners who cannot buy coverage elsewhere.
It insures about 46,000 homes in Jackson, Harrison, Hancock, George, Stone and Pearl River counties.
To help keep premiums down, board members meet each year with the reinsurance market’s major players, who are concentrated in London and Bermuda.
Reinsurance is insurance for insurers. It protects the board from debilitating claims, such as those from Hurricane Katrina in 2005.
For the 2011 storm season, the wind pool bought $815 million in reinsurance for $69 million — the same amount it paid for $750 million in reinsurance for 2010.
“The cost of reinsurance is the major expense of the wind pool in a non-storm year,” said Mark Cumbest, a reinsurance committee member, owner of Cumbest Realty in Jackson County and member of the state Real Estate Commission. “It is the major driver of the cost of insurance for wind pool customers.”
Cumbest is joined by board members Chris Boone, Joe Shumaker and Lorrie Brouse.
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