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ICRMP adviser warns reinsurance crunch pushed public-entity premiums higher; counties told to budget for midyear exposure bills
Summary
An ICRMP representative told Teton County commissioners that a global reinsurance capacity shortage and increased catastrophic losses forced the pool to raise retentions and pass through higher premiums; members should expect incremental billing if they add more than $5 million in insured property between annual snapshots.
An Idaho Counties Risk Management Program (ICRMP) representative told the Teton County Board of Commissioners on June 11 that global reinsurance market changes and rising catastrophic claims have driven substantial increases in property insurance costs for public entities.
The presentation explained why ICRMP moved from low retentions in earlier years toward higher retentions to manage sharply higher reinsurance prices and constrained capacity. The presenter said the program moved to a $10 million retention in 2023, later reduced to $1 million plus a $2.5 million aggregate in 2024, and that those shifts reduced a prospective multi-million-dollar premium spike for members.
Why it matters: Counties, cities, schools and other public entities that pool through ICRMP face larger annual bills driven by a combination of market cycles, reinsurance pricing and higher replacement costs for infrastructure. Commissioners and municipal budget officers were advised to plan for midyear premium adjustments tied to added insured value.
ICRMP framed the problem as a market cycle: a prolonged soft market led to underpricing, investment income kept insurers solvent for a time, and a spike in catastrophic losses (notably hurricanes and severe convective storms) together with higher inflation prompted reinsurers to shrink capacity and demand higher prices. “This is not something that, you know, most people would rather go to have a root canal than listen to somebody talk about insurance,” the presenter said while introducing the market-cycle explanation.
The presenter described how reinsurance — insurance for insurers that spreads large losses across the global market — tightened in 2023 after major events including Hurricane Ian and a rise in severe convective storms. He said reinsurers’ exit or retrenchment forced ICRMP to retain more risk or face a multi-million dollar price increase it could not pass fully to members.
ICRMP’s recent underwriting responses included taking higher retentions and changing billing practices. The program will continue to issue May renewal quotes using March 1 exposure snapshots but now will take a second exposure snapshot on July 1 and issue incremental bills when a member’s exposure grows by $5 million or more between those snapshots. The presenter said the new threshold aims to balance members’ budgeting needs with the pool’s obligation to pay higher reinsurance costs for each added dollar of exposure.
Commissioners and staff asked technical questions about total insured value (TIV) calculations, what counts as property exposure (replacement cost for structures and contents; land is not insured), and whether smaller, Idaho-focused reinsurance markets are feasible. The presenter said no single-state reinsurer exists at scale and that international reinsurers’ exposure is pooled across many U.S. catastrophes, so Idaho entities pay into a shared global capacity.
On premium changes, the presenter said ICRMP passed through average increases of about 15% in 2025 after much larger increases across the prior two years and that market signs point to gradual rate stabilization as reinsurance capacity improves. He emphasized, however, that hard-market increases fall quickly and soften slowly, so sudden declines in price are unlikely.
ICRMP staff and a longtime local insurance agent (who has served local public entities for decades) also advised risk-reduction measures municipalities can take to reduce exposure: maintain building systems, keep replacement-cost appraisals current, address deferred maintenance, and consider targeted mitigation steps (for example roof, plumbing and mechanical system replacement and prevention). The agent said claim-repair and restoration costs have risen sharply and cited specific examples where mitigation bids jumped from roughly $10–$12 per square foot to $28–$30 per square foot in recent years.
Commissioners were told that ICRMP will provide members an ability to estimate incremental costs tied to added exposures and that county staff should incorporate capital projects and anticipated insured-value changes into budgeting. The presenter asked members to notify ICRMP early when large capital purchases or projects are planned so the pool can estimate incremental premium impacts.
Ending: Commissioners did not take formal action on the presentation beyond questions and follow-up requests. ICRMP staff offered to provide further member-specific detail and estimates, and local officials said they would coordinate with the pool’s underwriters to clarify any unusually large increases in specific member bills.
