Information for policyholders and agents


At first blush, reinsurance may sound like a confusing concept, but it can be simply understood as “insurance for insurance companies.” While AmCap Insurance is well equipped to field common losses caused by fire, water, lightning and other perils, we rely on a robust reinsurance program to handle large scale events that may result in losses to many insureds. Reinsurance provides the resources to pay claims following unforeseen and catastrophic events, such as hurricanes. AmCap Insurance purchases enough reinsurance coverage to protect against at least two 1-in-100 year storm events, which effectively allows us to cover a 1-in-250 year event.

Reinsurance rates affect insurance pricing

For companies like AmCap Insurance who strive to offer the most complete protection possible, reinsurance and insurance are inextricably bound together. For companies with many insureds exposed to potential hurricanes, it is not uncommon to spend half or more of each dollar they collect on reinsurance coverage.

Similar to how an individual’s policy can be subject to price fluctuations annually based on changing risk factors, an insurance carrier’s reinsurance policy can become more expensive as a reflection of global events and disaster risks. Rates for individual policyholders, as a result, will reflect changes in reinsurance pricing.

Florida reinsurance prices on the rise

Hyperion X Analytics, a data analytics-focused unit of the Hyperion Insurance Group, showed that reinsurance rates have climbed on average 26% in 2020, following a 15% rise in 2019, and a modest increase in 2018. The Miami Herald reports that this is the most expensive these rates have been since 2005, after consecutive hurricanes brought massive damage and loss.

What does this mean for insureds? Windstorm coverage premiums have been rising as much as 33%, and in some cases doubling or tripling, compared to the prior year. Some insurance companies have chosen to drop large numbers of their policyholders, issuing cancellations to reduce their exposure to hurricane-prone areas.

Our philosophy

AmCap Insurance believes in ensuring the protection of our policyholders. As a result, we are deeply invested in our reinsurance coverage. We believe an insurance company that does not adequately protect itself through reinsurance coverage is leaving its customers unprotected.

For this reason our reinsurance strategy prioritizes volume, rating, diversity, and redundancy in our policies. As global catastrophes and COVID-19 continue to impact the reinsurance market and its prices, we strive to provide the most robust coverage at the best possible prices to our customers. Our reinsurance philosophy is just one of many factors that set us apart from many other Florida-based insurance companies.