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Hamilton curbs US wind exposure in international binders book

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Hamilton is to scale back on US named wind exposure on its international property binders book, marking the latest carrier to curtail its cat risk written via delegated authorities, Insurance Insider can reveal.

The news comes after this publication broke the news last week that Canopius had taken the decision to cull all US wind exposure from its delegated authority arrangements, a move which will result in the non-renewal of a substantial part of Canopius’s US property binders book.

The move to reduce US wind exposure on Hamilton’s property binders book represents much less of a drastic move than that made by Canopius, with the in-scope business accounting for a much smaller proportion of the Hamilton property binders portfolio.

Nevertheless, the move underlines the challenges the binders market has faced with performance on US wind books, with pricing still said to be inadequate despite rate rises now creeping into double digits.

The US property binders market has also had a challenging period in terms of loss experience, with last year’s Hurricane Laura falling heavily on the binders market at a level where most losses were retained net. This year’s Winter Storm Uri and Hurricane Ida have added to loss experience this year.

It is understood that Hamilton will still write US property business for other cat perils within its binders book.

A spokesperson for the company said: “As part of our ongoing portfolio management, we have taken the proactive decision to reduce our windstorm exposure in our US property binders book.

“This decision impacts a small subset in one sector of our overall US property binders portfolio.

“We remain committed to our clients and brokers, and we are working closely with the small portion of those within our portfolio who are impacted.”

The decision comes amid wider market discussion around the adequacy of cat pricing, with debate around whether the market is charging enough premium for the increased frequency and severity of events being experienced.

Meanwhile, it also furthers ongoing contraction in the amount of available delegated authority capacity in London, particularly for US property binders.

The drawback in London, which started in earnest two years ago, was brought on by a tougher stance from Lloyd’s on performance and the redeployment of capital towards better-rated open-market business.

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