Florida insurance market sees first reinsurance price decrease in years: FLOIR

According to the Florida Office of Insurance Regulation (OIR), for the first time in years its Annual Reinsurance Data Call has found that, on average, insurance carriers operating in the state have seen a decrease in the price of their reinsurance.

This comes at a time when the regulator is keen to highlight the successes achieved with legislative changes focused on property insurance, which continue to have a positive effect.

Florida’s Insurance Commissioner Michael Yaworsky highlighted the increasing interest in writing business in Florida.

Among the notable news in recent weeks, State Farm said it sees increasing opportunities to underwrite property business in Florida, while a ninth new insurer, Trident Reciprocal Exchange, has been recently approved.

Also of note, Progressive Insurance executives met with the Insurance Commissioner and have committed to continuing to invest in their businesses underwriting in Florida.

“Today’s announcements are a further indication of the continued strengthening of Florida’s property insurance market,” said Yaworsky. “OIR will continue to work with Florida-based and national carriers, like Progressive, to recruit and retain business so that all Floridians may benefit from a strong market.”

The FLOIR points to increased participation in depopulation of Florida’s Citizens Property Insurance Corporation as well, with insurers approved to assume 768,692 policies from Citizens in 2024, an 858% increase since 2022.

So far, that has resulted in 132,445 policies being removed from Florida Citizens, while Citizens’ exposure has reduced $64,852,563,061 this year thanks to these depopulation efforts.

Indicative of the improving Florida property insurance market, the 180-day average request for homeowners’ rates as of August 1st 2024 is just 1.2%, FLOIR said.

In fact, twelve insurers have filed for a rate decrease to take effect in 2024 and 24 companies have filed a zero percent increase, which FLOIR said covers 1.8 million policies in Florida.

But, perhaps most importantly for the health of Florida’s insurance market, is the appetite of the reinsurance market to support its carriers.

Preliminary results from the latest Annual Reinsurance Data Call indicate that the risk-adjusted change in reinsurance cost decreased on average -1.7% from 2023, which is the first decrease in years, FLOIR explained.

A vote of confidence from the reinsurance community can very much help Florida’s primary insurance market back to health.

But, it’s also worth noting that the appetite for risk in Florida is not being seen across the board, with many reinsurers reducing their appetites in 2024 given the forecasts for an active hurricane season.

But, sufficient stability in reinsurance combined with renewed confidence in Florida’s property insurance market legislation, is certainly helping and depending on how the state fares through the rest of the hurricane season, the state could find conditions for its insurers even better next year.