Re/insurers better positioned to withstand above average 2025 hurricane season: Fitch

Re/insurers are better positioned to withstand the 2025 hurricane season and other potential catastrophic events, thanks to recent premium rate increases, surplus growth among property and casualty (P&C) insurers, and favourable legislative reforms in the Florida market, according to Fitch Ratings.

As per Fitch’s new report, the number of hurricanes for the 2025 Atlantic hurricane season is forecast to be slightly above average.

For comparison, the 2024 Atlantic Basin hurricane season produced 18 named storms and 11 hurricanes, five at Category 3 or higher.

Despite the potential for significant storm activity, Fitch stated that the capital strength of re/insurers will allow them to absorb large insured losses from an individual hurricane or other catastrophic event in the near term.

“However, a confluence of large events in a short period may lead to capital reductions and rating pressure,” the rating agency added.

Similarly, Acrisure Re recently noted that the 2025 hurricane season is expected to bring above average activity, with the reinsurance market appearing well-positioned to manage the potential impact.

Fitch’s new report also looked at the legislative and regulatory tort reforms implemented in Florida since 2019, which have reportedly stabilised rapidly growing loss costs and litigation rates on claims that had exceeded national averages.

“Initial indications show benefits of the reform, but broader return of capacity from highly rated insurance carriers to the state has been limited,” the ratings agency said.

Fitch continued, “Policies in force at Citizens Property Insurance Corporation, Florida’s state-sponsored insurer of last resort, peaked in 2023 at about 1.4 million, but had fallen to 813,000 as of May 2025. Policy counts will continue to decline as additional carriers garner interest in policy take-outs.

“However, Florida specialty insurers’ capital tends to be weaker than larger, national peers and could be challenged by a significant catastrophe year.”

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