After enduring significant losses due to natural disasters in recent years, Florida’s property insurance market is exhibiting signs of stabilization and improvement. The Florida Office of Insurance Regulations (OIR) has been actively engaged in initiatives aimed at bolstering the market’s resilience through legislative reforms and attracting additional insurers to the state.
In a recent development, the OIR approved the entry of eight property and casualty insurers into the market, signaling a positive shift. Furthermore, the acquisition of Trusted Resource Underwriters Exchange, a reciprocal insurer, has been greenlit, infusing more than $1.25 billion in capital into the market.
The state’s residual property insurance market, operated by Citizens Property Insurance Corporation, has also witnessed notable progress in its financial standing following a period of turbulence. In 2023, Citizens recorded a net income of $746 million, a stark contrast to the $2.2 billion loss reported in 2022. The corporation’s combined ratio, a key metric indicating underwriting profitability, saw a substantial improvement, plummeting to 59.5% in 2023 from a staggering 204.4% in the previous year.
Citizens’ Depopulation program, designed to transition policyholders from the residual market to the voluntary market, has gained momentum. In 2023, over 275,000 policies were assumed from Citizens, with an additional 354,000 policies slated for assumption by 13 approved companies in 2024.
The broader Florida property insurance market experienced a significant turnaround in 2023, with a combined ratio approaching breakeven. This marks a notable improvement from consecutive years of billion-dollar losses and represents the first profitable operating ratio since 2016. Insurers’ proactive measures to establish lower loss reserves underscore reduced market uncertainty.
Moreover, there has been a positive adjustment in the Florida Hurricane Catastrophe Fund rates, with participating insurers benefiting from an average decrease of 7.38% in 2024.
These developments signal a promising trajectory for Florida’s property insurance market, with concerted efforts underway to enhance its resilience and financial stability in the face of ongoing challenges posed by natural disasters.
