CEA Chooses Reinsurance Team for Assistance

The California Earthquake Authority Governing Board has approved a team of reinsurance intermediaries to work on the CEA’s behalf to meet the reinsurance needs of the nation’s largest residential earthquake insurance provider.

AON Benfield will act as lead intermediary, with Guy Carpenter & Company, LLC and Willis Re Inc. as associate intermediaries, to form a team that will access reinsurance capacity, analyze global reinsurance markets, assess creditworthiness of potential reinsurers, determine and negotiate the lowest possible price for the CEA’s reinsurance cover, and assist the CEA staff and Board in meeting generally all the CEA’s reinsurance needs.

"The CEA considers AON Benfield, Guy Carpenter and Willis Re to be the three top reinsurance intermediaries in the world,” said CEA Chief Executive Officer Glenn Pomeroy. “This new team positions the CEA to access the broadest worldwide reinsurance capacity, evaluate the financial soundness of potential reinsurance markets and enable us to safely place the CEA’s reinsurance program at the most competitive rates in a cost-effective manner. This team has the experience, skills and global presence to help us meet our reinsurance needs with flexibility and confidence.”

The CEA Governing Board made the selection at its meeting Thursday following an open, competitive bidding process. It sought intermediary firms that could reliably and safely place the CEA’s reinsurance program at the most competitive terms. The CEA released its Request for Qualifications on May 1 and published it on the CEA’s Web site.

In addition, the RFQ was published on the California State Contracts Register and advertised in The Wall Street Journal, national edition. Proposals were received from five firms. During the process, AON began an acquisition of proposer Benfield, and the evaluation panel paused the evaluation process until the merger was finalized. The team will act as brokers under a five-year contract to deliver annually one of the world’s largest reinsurance programs to supply much of the CEA’s claim-paying capacity.

The CEA currently purchases more than $3 billion in catastrophe reinsurance.