Newly litigated Florida claims & AOB percentage of them rises: CaseGlide

The latest monthly data from CaseGlide shows a resurgence in newly litigated property insurance claims at Florida’s largest P&C insurers, while the percentage of litigated claims related to the assignment of benefits (AOB) rose further.

The latest data update from CaseGlide, a company that tracks property insurance related litigation trends in the state of Florida, shows that in the month of June 2022 the number of new litigated claims rose 5.3% from May, to 4,261 for the period.

This is “in line with a pattern seen since January for new litigated claim figures hovering between the low to mid 4,000s,” CaseGlide explained.

A month ago, CaseGlide cautioned that it could take some quarters for the property insurance reforms enacted by the legislature in Florida to deliver any meaningful benefits to insurance and reinsurance interests operating in the state.

So that’s certainly evident in the fact newly litigated cases rose again in June, but clearly that would be far too early for any effect of the legal reforms to have taken hold and the proof of the reforms effectiveness may not be evident for some time.

Out of the 16 largest Florida P&C insurers that CaseGlide regularly monitors, 11 showed a month-over-month increase in newly litigated claims in June 2022.

Perhaps concerning is the fact that three showed increases of greater than 30%, while another four showed increases of between 15% and 29%.

This perhaps implies there could be a trend of litigation being filed more quickly in Florida at this time, before reforms take effect.

Five P&C insurers showed a month-over-month decline in their reported numbers of newly litigated claims, CaseGlide also said.

Perhaps a little more positively, Notices of Intent to Initiate Litigation (NOIs) received by the same insurers were relatively flat in June, with a month-over-month decrease of 12 with 3,050 NOIs.

The most concerning statistic for insurance and reinsurance market interests is likely the one related to the percentage of new litigated cases that feature an assignment of benefit (AOB) claim.

This rose from 36% in May, to 38% in June 2022, and CaseGlide said that “AOB percentages of new litigation remains higher than at any month in the past 18 months.”

AOB claims have been a significant driver of the loss creep challenges reinsurance companies and ILS funds have faced in Florida over recent years, so their proportional increase out of the new claims filed might be viewed as worrying.

Miami-Dade County, Florida remains the state leader in terms of the percentage of new litigation at 26%, followed by Broward at 16%, Orange at 7%, Palm Beach at 6% and Hillsborough at 5%.

Recall that the industry has been calling for meaningful change in Florida’s property insurance market, more meaningful than has recently been enacted in the reforms,, while reports suggest it could be years for the reinsurance market to regain full-confidence in Florida.

As a result, further Florida property insurance reforms feel essential to stabilise the marketplace.

Property insurance policies continue to flow towards the insurer of last resort, Citizens Property Insurance Corporation and continued high rates of litigation will ensure less well-capitalised P&C insurers remain under pressure.

The next Florida legislative session where property insurance reforms could be tabled isn’t scheduled until May 2023, just in advance of the next reinsurance renewals for the state.

So, we wouldn’t be surprised to hear of calls for another special session, to try and rectify Florida’s issues well in-advance of its insurers needing to go through another difficult reinsurance renewal season.