Reinsurance Premiums Drop After Years of Hard Markets

Both the property and liability programs received good news from reinsurers for 2026 after several years of hard markets. The premiums for each program decreased for 2026. During its meeting Nov. 14, the MCIT Board of Directors approved renewals for next year.

MCIT purchases reinsurance for all major lines of coverage to protect the financial integrity of the MCIT pool, insulating it and its members from the potential of catastrophic loss.

Property Reinsurance Rate Drops 15 Percent

MCIT’s property reinsurance broker, Guy Carpenter, presented the results of its aggressive marketing efforts. The broker again approached reinsurers worldwide. In contrast to recent years, market capacity has improved, leading to three carriers providing quotes to cover MCIT’s per occurrence coverage limit of $200 million associated with program total insured values.

The value of member property covered by MCIT continues to grow, now in excess of $10.2 billion, an 11 percent increase from 2025 values, or $1.1 billion.

Travelers, Great American and Lloyds of London each quoted renewal pricing at the current retention level of $1.5 million (the amount MCIT pays for each claim before reinsurance participation) along with pricing at a $2 million retention.

The competition proved advantageous for MCIT, as Travelers decreased its original quote and offered additional incentive with a $500,000 credit for adding a $500,000 annual aggregate deductible to the program in an effort to retain MCIT’s business.

Ultimately the board voted to renew with Travelers at the existing retention level with the annual aggregate deductible, reflecting a rate decrease of 15 percent. Even factoring in MCIT’s increased exposure base, 2026 premium equates to $4.03 million, which is $769,000 lower than 2025, assuming 2026 losses do not pierce the annual aggregate deductible.

Liability Premium Decreases $378,000

MCIT is in its fifth year of membership in County Reinsurance Limited (CRL), an organization that provides reinsurance exclusively to county governmental risk sharing pools like MCIT across the country. With its homogeneous membership, CRL has a deep understanding of liability issues and exposures that are common to most of its public entity members.

For 2026, MCIT marketed its liability program to commercial reinsurers, in addition to requesting renewal quotes from CRL to ensure the best value for the trust. Guy Carpenter handled the marketing efforts for MCIT and approached 25 carriers. It received declinations from nearly all providers based on the type of exposures and retentions of the MCIT program.

Primarily, commercial reinsurers continue to be wary of law enforcement exposures for public entities.

The board voted to renew with CRL that, in contrast, provided a decrease in premium for MCIT to renew at its existing $2 million per claim coverage limit subject to a $1 million per claim retention for a premium cost of $2.02 million. This is a $378,000 reduction from 2025.

New Cyber Reinsurance Partner to Come

MCIT has purchased the program’s cyber reinsurance coverage through CRL since 2023 and was aware of its decision to exit the cyber market in 2026. MCIT has been working to identify alternate reinsurance options and has found that the market in this area has softened, offering MCIT a number of options to explore.

The board considered several options, including MCIT’s ability to self-insure the existing program into 2026 while program structure is refined and presented for further discussion in 2026.

MCIT will continue its cyber program in 2026 under 2025 limits, terms, conditions and exclusions until a new reinsurance partner is secured. MCIT will provide details to members about any coverage program changes required by the reinsurer at that time.

Generally, MCIT anticipates that the change in carrier will provide enhanced coverage for members.