Florida property insurance market shows signs of improvement – Triple I
Florida property insurance market shows signs of improvement – Triple I | Insurance Business America
Insurance News
Florida property insurance market shows signs of improvement – Triple I
Agency notes the impact of actions taken dating back to 2022
Insurance News
By
Jonalyn Cueto
Florida’s property insurance market, once plagued by rampant legal system abuse and fraudulent claims, is showing early signs of stabilization as the 2024 Atlantic hurricane season approaches. According to a new Issues Brief published by the Insurance Information Institute (Triple-I), legislative reforms passed in 2022 and 2023 have started to create a pathway to a more stable and secure insurance environment in the Sunshine State.
One of the key positive outcomes is the ongoing depopulation of Citizens Property Insurance Corp., the state-backed insurer of last resort, which had become the largest home insurer in Florida due to the risk crisis. Eight new property insurers have been approved by Florida’s regulator to enter the market this year.
Triple-I CEO Sean Kevelighan acknowledged the improvements.
“Property insurers want to do business in a state like Florida, which is growing, and there is now some hope that this could eventually happen more and more. However, it is important Florida’s public policymakers ensure the reform that is helping the market recover is not eroded by the billboard lawyers,” he said. Kevelighan also warned that plaintiff attorneys are attempting to shift their abuse tactics to other states as Florida tightens its regulations on filing property claim lawsuits.
Despite the recent progress, Florida’s insurance industry recorded an underwriting loss for the eighth consecutive year in 2023, as reported by S&P Global. However, the loss was significantly smaller than in recent years. The top 50 private insurers in Florida posted a cumulative underwriting loss of $190.8 million in 2023, a significant improvement from the $1.80 billion underwriting loss in 2022 and the $1.52 billion loss in 2021.
Future of the market
Home insurance premiums in Florida are expected to continue increasing in 2024, though at a “more moderate level” compared to previous years, according to Triple-I. Additionally, some regional insurers have filed for small statewide average rate decreases, providing a glimmer of hope for homeowners.
Recent legislative reforms are beginning to make a tangible impact on litigation costs. Florida’s defense and cost-containment expense (DCCE) ratio—a key measure of the impact of litigation—fell to 3.1 in 2023, from 8.4 in 2022, according to S&P Global. In dollar terms, direct incurred legal defense expenses in 2023 were $739 million, a notable drop from 2022’s $1.6 billion.
In comparison, incurred defense costs in the two largest US insurance markets in 2023 were $401.6 million in California and $284.7 million in Texas.
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