Florida insurers’ litigation exposure still of concern: CaseGlide CEO Todd

Despite attempts to reform the Florida property insurance market and the fact newly litigated claims dropped in February 2022, the litigation exposure of P&C insurance carriers in the state remains a concern, according to Wesley Todd, CEO of CaseGlide.

Todd raised concerns last month, after newly litigated claims jumped 37% month-on-month in January 2022 for Florida’s largest P&C insurers.

This month, Todd highlights the fact litigation rates remain extremely volatile in Florida, as property insurers continue to see ups and downs in case load.

But, even with newly litigated claims in the state falling some 11% in February, the number of claims reported by P&C insurers in Florida remains around the monthly average of the last seven months, which is the period since Senate Bill 76 (SB76) took effect.

February 2022 saw new litigated claims falling 11% from January’s figure, to 4,067 new litigated claims which is down by 528 from January’s figure of 4,595.

Of the 17 largest Florida insurers that CaseGlide monitors, the company says that all but one showed a month-over-month decline in February.

Fourteen insurers saw their new litigated claims decline less than 25% from January, while two showed a 40% decrease.

A single exception among the insurers recorded a 6% increase month-over-month.

However, Notices of Intent to Initiate Litigation (NOIs) received by the same P&C insurers actually rose, with February’s figures reflecting an increase of 72 or 3%, to 2,740, up from January’s total of 2,668, CaseGlide said.

NOIs have been increasing steadily over the past eight months, CaseGlide explained, from 1,311 in July 2021 to 2,740 in February 2022.

Combined, new litigated cases and NOIs fell 6% month-over-month from January’s figures.

“As stated last month, we’re still experiencing some monthly volatility with new litigated claims since SB76 went into effect in June 2021, and we continue to see NOIs increase steadily,” Wesley Todd, CEO of CaseGlide said.

“In fact, the volume of NOIs in February is more than double the amount filed in July 2021, the first month they were put into use. Because of that, we still believe that Florida insurers’ litigation exposure is of concern.”

Interestingly, the percentage of new litigated claims that are assignment of benefit (AOB) related rose again in February.

AOB cases as a percentage of total new litigated cases increased to 34% in February, up from 31% in January.

It’s the third consecutive month where AOB cases made up over 30% of new litigation, and February now represents the highest percentage in well over 12 months, CaseGlide cautioned.

As we explained last week, insurance, reinsurance and insurance-linked securities (ILS) markets hoping that new legislative actions targeted at reforming the challenged Florida property insurance market might pass this year, appear to have been disappointed again as legislation failed to get passed during the latest session.

With litigation rates remaining high, as reported by CaseGlide and AOB seemingly still an issue, Florida’s property insurance market is now heading rapidly towards the 2022 Atlantic hurricane season with little changed from prior years, which may raise nerves in the reinsurance and ILS market.

Also read:

No quick fix as Florida property insurance reforms fail to pass.

Another one bites the dust – Florida’s insurance failures continue.

Florida P&C claims litigation concerning, as cases soar: CaseGlide CEO Todd.

Florida P&C rate filings show reinsurance firming needs to continue.

Assignment of benefit (AOB) claims rising for Florida P&C insurers.