Resilience in Florida’s property insurance market amid hurricane challenges

After Hurricanes Helene and Milton made landfall along Florida’s coast, Insurance Commissioner Michael Yaworsky shared encouraging updates regarding the state’s property insurance market.

Recent announcements from Progressive, State Farm, and the approval of several new property insurers highlight the positive impact of Florida’s major 2023 reforms.

Despite scaling back operations in other regions, national insurance companies continue to expand their presence in Florida.

Following a recent meeting with Governor DeSantis and USAA representatives, USAA reaffirmed its commitment to investing in Florida’s growing market, stating that it “is very encouraged to see the progress toward a healthy insurance marketplace in Florida, and we are optimistic the 2023 legislative reforms will bring about a more robust, stable environment. USAA remains committed to our members in Florida where we are responsibly growing and serving our membership in this critical marketplace.”

“I am extremely pleased to share these announcements, as they point to continued strengthening of Florida’s property insurance market, which is contrary to the narrative that has been circulating about our industry in recent months,” added Insurance Commissioner Michael Yaworsky.

“OIR has, and will continue to work with all carriers in the state to bolster the significant progress that has been made and finish the year on a glidepath to sustained growth”

The improving insurance market is supported by recent rate filings, increased participation in the Citizens Property Insurance Corporation’s (Citizens) Depopulation Program, lower reinsurance costs, and a growing number of insurers committing to Florida.

As of October 9, 15 companies submitted 22 filings for rate reductions that will affect 1.5 million residential policies starting in 2024. Additionally, 29 companies filed for a zero percent increase, impacting 1.9 million residential policies.

The average request for homeowners’ insurance rates over the past 30 days is currently 1.6%, a significant decrease from last year’s average of 7.03%. Furthermore, the 180-day average request for homeowners’ rates in 2024 is 0.9%, down from 8.08% a year ago.

The OIR actively oversees insurer conduct to ensure compliance with Florida law, emphasising that insurers must act in good faith and deal fairly with consumers during the claims process.

The office focuses on timely resolution of consumer issues and can initiate informal inquiries or investigations if violations are found. Based on the outcomes of these reviews, OIR may impose administrative actions, penalties, and require restitution to protect consumers from unfair business practices.

In the fiscal year 2023-24, insurers returned $8 million in monetary restitution directly to Florida consumers and completed additional corrective actions mandated by OIR after market conduct investigations.

The OIR has observed continued growth in the Citizens Depopulation Program, with 18 companies approved to take on over 1 million policies through November 2024. Recently, eight companies were approved to assume 235,035 personal residential policies for the November assumption date.

The admitted market, particularly in the homeowners’ sector, has expanded through Citizens’ depopulation efforts and increased policy writing.

Interest in condominium association policies is also rising as admitted carriers seek to take over these policies from Citizens, resulting in a $15 billion reduction in exposure from January to August 2024.

Finally, reinsurance costs for Florida carriers continue to decline, with most companies spending less on reinsurance than in 2023. The average risk-adjusted cost for 2024 is down by 0.7%, a significant reduction from last year’s increase of 27%.

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