150 Midwest Carriers Went Into This Year Without Reinsurance

Mica Cooper’s insurance career started in 1990, a mile down the road from what would become Duck Creek’s original headquarters in Bolivar, Missouri — a town of 10,000 people that, improbably, was once a genuine hub of comparative rating technology. He built comparative rating platforms for ISO/Verisk (sold on CDs for $50,000 apiece in the 1990s), which meant seeing inside the underwriting “black boxes” of Farmers, State Farm, USAA, Progressive, GEICO, Hartford, and others — batch-rating logic most agents never got direct visibility into.

His framing of where insurtech is now, three decades later, is genuinely provocative: much of what gets marketed as brand-new — including comparative rating itself, and even early pet insurance — was already built by Vertafore in the 1990s. What killed it wasn’t the technology; it was a leadership and platform change around 1999 that shut down comparative rating products for roughly five years, at exactly the moment Mica and the future Duck Creek founders left to start their own companies. His read: the industry is recycling ideas that already worked, minus the institutional memory of why they worked the first time.

In Episode 107 of InsurTechTalk, Mica and I covered the 2023 reinsurance capital crunch driving double-digit rate increases across the board, what agents can actually control in that environment, and why he insists blockchain in insurance has exactly one legitimate use case.

About Mica Cooper

Mica Cooper is CEO and President of Aisus (Agency Insurance Services) and InsureCrypt, based in Bolivar, Missouri. He built one of the earliest internet-based comparative rating platforms in the industry, serving Texas auto insurers among others, and has spent over 30 years building insurance technology — from on-premise comparative rating in the 1990s to a cloud-based, blockchain-backed policy administration platform today. He also participated in the original model design work behind ACORD standards internationally and led the team building ACORD 2 and ACORD 3.

The 2023 Reinsurance Squeeze, Explained From the Capital Markets Up

This was the substantive core of the conversation, and Mica walked through the mechanism in more macro detail than is typical for an insurance podcast.

• Reinsurers historically leveraged their own capital several times over in the capital markets — Mica’s example: a reinsurer with $1 billion of capital might leverage that into $4-5 billion of reinsurance capacity, sourced from lenders in the broader capital markets
• Going into the recording, that leverage was contracting — a reinsurer that got $3 billion from capital markets the prior year might only secure $2 billion this year, as lenders turned cautious watching Fed rate decisions and broader market volatility
• Historically, reinsurance contracts settled around mid-October at industry conferences (PCI, NAMIC); this cycle, reinsurers were being told to wait until November or December to learn whether they’d have a contract at all, and at what price — creating genuine existential uncertainty for carriers dependent on that capacity
• Mica’s blunt prediction: some carriers would learn in December that they had no reinsurance for January 1 — meaning they’d simply be out of business

His broader macro framing (delivered with characteristic intensity): M2 money supply contraction at levels not seen since 1933, leading economic indicators at their worst since 1946, and bond market stress he characterized as historically unprecedented — all compounding into a capital environment where reinsurers, after years of what he called “quantitative easing as crack cocaine” for cheap capital, were suddenly facing real capital discipline.

What This Means for Rate Increases

Mica’s specific numbers, delivered as a floor rather than a ceiling:

• Minimum 15% rate increases across the board over the following six months, even for carriers with genuinely strong, profitable loss ratios — purely a function of increased cost of reinsurance capital
• Layering in inflation (roughly 10%) and elevated capital cost, 25% increases become the realistic broad-market expectation
• For wildfire-exposed and Florida-hurricane-exposed markets specifically, 25-50% increases

The practical, human-level consequence: policyholders on variable-rate loans taken out during COVID were hitting renewal simultaneously with these increases, in some cases seeing commercial premiums genuinely double. Combined with rising mortgage payments, Mica’s read was straightforward — when both housing cost and insurance cost rise together, people price-shop, and agents are caught managing that shopping wave with insufficient staff and insufficient available markets to place the business.

What Agents Can Actually Control

Mica was candid that agents have limited structural leverage against a reinsurance-driven hard market, but identified concrete, controllable actions:

• Book rolls — moving a book of business from a failing or exiting carrier to a new one — have become a major operational burden. Mica described agents managing five simultaneous book rolls with insufficient staff, forced to prioritize by premium size, meaning smaller policyholders risk being effectively deprioritized into cancellation simply because nobody gets to their file in time
• Insurance-to-value corrections — because inflation has left many books undervalued by 20-30%, agents doing a proper insure-to-value pass during a book roll often see coverage amounts (and premium) rise 30% on property alone — meaning an agency can lose 5% of policyholders during a difficult renewal cycle and still grow total book value, simply by correcting undervalued coverage they should have been maintaining all along
• Communication — Mica described using ChatGPT to draft a client letter during a six-day stint running an insurance company after its leadership abruptly departed, explaining rate pressure in plain terms. His view: most people accept a rate increase once the “why” is explained (inflation, capital cost, reinsurance pressure) — the genuinely difficult conversations are with fixed-income policyholders in coastal or wildfire-exposed markets who simply cannot absorb a doubled premium and may be forced to sell

Concrete Steps Homeowners Can Take to Improve Their Rate

Mica listed specific, actionable underwriting factors that materially affect renewal pricing in hard markets, particularly in wildfire-exposed regions like California:

• Bringing an older home up to current code — specifically fire-rated vent screens and thicker-gauge metal roofing
• Maintaining defensible space — keeping brush and yard debris clear, since California insurers are actively canceling policies over failure to do so
• Credit score — Mica called this the single most important rating factor after claims history; on-time payments and a strong score matter more than most homeowners realize
• Avoiding small claims — a $1,200-1,500 claim is generally better paid out of pocket than filed, since claims frequency (not just severity) drives future renewal pricing
• Accepting higher deductibles — a $2,500 minimum wind/hail deductible is becoming standard, with many carriers moving toward 2% wind/hail deductibles specifically

InsureCrypt: Blockchain With One Legitimate Use Case

Mica was refreshingly dismissive of blockchain hype in insurance, stating flatly: blockchain does exactly one thing, and only one thing — audit. Anyone claiming otherwise, in his words, is “selling snake oil.”

His platform, InsureCrypt, uses a private blockchain (permissioned, trust-based, as opposed to public chains like Bitcoin, which settle slowly precisely because they assume zero trust between parties) to encrypt and store data with three specific properties:

• Data immutability — once written, a record cannot be altered; any change creates a new, timestamped entry rather than overwriting the original
• Access tracking — the system logs not just who entered data, but who accessed it, closing a gap Mica said exists in most conventional policy admin and even banking core systems, where system administrators typically retain unrestricted, untracked access to underlying data. His platform’s architecture puts a genuine access barrier (via AWS infrastructure controls) between administrators and raw data, so even privileged users can’t silently copy or alter records outside the platform’s audited access path
• Point-in-time reporting — because nothing is overwritten, a Q2 report run in January will reconcile precisely against the same Q2 report run in July, with every subsequent correction visible as its own timestamped transaction rather than an invisible edit to historical data — solving a genuine accounting reconciliation problem he described one major vendor struggling with in a Canadian GAAP-compliant deployment

He was equally clear about what blockchain should not be used for: storing the underlying data itself (documents, images, photos) rather than a cryptographic signature of that data. He cited a specific case of a startup storing multi-gigabyte medical images directly on-chain — a design mistake he considers a fundamental misunderstanding of what blockchain is actually for. The correct pattern, in his framing: store the large file in conventional storage, and store only its verifiable signature on-chain.

The Serverless Architecture Underneath It

Aisus’s cloud infrastructure runs serverless (AWS Fargate) rather than maintaining always-on containers. Mica’s plain-language explanation: traditional cloud deployments (EC2 with Kubernetes orchestration) keep containers running continuously — production, QA, beta testing instances all consuming cost around the clock, scaling up and down with load but never fully idle. Serverless containers spin up only on demand, incurring a brief cold-start cost but otherwise consuming nothing when unused. His concrete comparison: a friend’s insurance organization on Azure was paying over $10,000 a month in infrastructure costs; Aisus’s bill to store data for 30 insurance companies runs under $200 a month using this architecture.

Advice: Read 30 Minutes a Day

Asked for closing advice, Mica’s answer was specific and slightly pointed, drawn directly from his six-day stint running a carrier: he asked the board president whether the company held a specific reinsurance instrument, and she didn’t know — because she wasn’t reading industry press. His recommendation: subscribe to trade publications (he named the Business Insurance Journal and reinsurance-focused outlets) and read at least 30 minutes a day. He described attending a recent insurance conference where directors were genuinely shocked to learn about the broader money supply and capital market pressure bearing down on their own reinsurance renewals — a gap he considers avoidable and, frankly, unacceptable for people running carriers.

Key Takeaways

• A genuine capital markets squeeze on reinsurer leverage — not just inflation — was driving 15% minimum rate increases industry-wide going into the recording, with 25-50% increases in catastrophe-exposed markets
• Reinsurance contract timing itself shifted later in the cycle (from mid-October settlements toward November-December), leaving carriers in real uncertainty about whether they’d have coverage for January 1 at all
• Book rolls have become a major, understaffed operational burden for agents navigating carrier exits, with smaller policyholders at real risk of being deprioritized into cancellation
• Insurance-to-value corrections during forced book rolls can offset policyholder attrition, since inflation has left many books undervalued 20-30%
• Concrete, controllable rating factors — credit score, avoiding small claims, code compliance, higher deductibles — remain genuinely effective levers for policyholders even in a hard market
• Blockchain in insurance has exactly one legitimate application — audit and data immutability — and should never be used to store the underlying large files themselves, only their cryptographic signatures
• Serverless cloud architecture can reduce infrastructure costs by roughly two orders of magnitude compared to always-on container deployments for insurance data platforms at moderate scale