AM Best, the international credit rating agency and insurance industry analytics provider, has reported a significant turnaround in the financial performance of Florida-based personal property insurers, with the sector generating close to $1 billion in underwriting profits after recording a $132 million underwriting loss two years earlier.
The findings were published in AM Best’s latest Market Segment Report, titled Florida Reforms Are a Positive Development; Underwriting Discipline Remains Essential. The report examined 51 Florida-domiciled insurers focused primarily on personal property business within the state.
AM Best said the analysis excludes companies linked to large national insurance groups, as well as Citizens Property Insurance Corporation (Citizens), while also incorporating insurers that have merged or become financially impaired in recent years to maintain consistency in historical comparisons.
According to AM Best, the improvement in market conditions has been supported by a reduction in litigation activity and lower levels of claim solicitation, which has encouraged new insurers to enter the Florida market and enabled existing carriers to recover from earlier losses. The company also pointed to advances in pricing sophistication as a contributing factor.
“The improved Florida property insurance landscape reflects reduced litigation and claim solicitation, attracting new writers to the state while allowing existing writers to recover from losses in earlier years and take advantage of more refined pricing sophistication,” commented Lauren Magro, Senior Financial Analyst at AM Best. “While 2024 marked the first year of an underwriting profit for the segment in over a decade, results in 2025 only further extended this trend and benefited from no named hurricanes making landfall.”
AM Best noted that Florida insurers continue to depend heavily on reinsurance because of the state’s exposure to hurricanes and severe weather events. The company said reinsurance pricing eased slightly during the 2025 mid-year renewals, with expectations of more meaningful reductions during the 2026 renewal period.
The report also showed that Florida insurers maintain considerably higher levels of ceded reinsurance leverage than the broader US personal property market. AM Best stated that the 10 largest active companies within the Florida composite recorded average ceded reinsurance leverage of 562% in 2025, compared with an industry average of 55% across the wider US personal property sector.
“With profitability stabilising and primary carriers’ balance sheets bolstered through sizable capital appreciation, along with stronger underwriting guidelines, some negotiating power shifting back toward primary carriers is likely,” added Chris Draghi, Director at AM Best. “However, prospective reinsurance market trends remain influenced by hurricane activity – a significant-sized hurricane event that passes through a major city in Florida could change market dynamics.”
AM Best added that Citizens remained the state’s largest personal property insurer, despite a decline of more than 44% in direct written premiums compared with the previous year. The company attributed the reduction to continued depopulation initiatives designed to move policies into the private market.
The report also found that defence and cost containment expenses among Florida insurers, commonly viewed as a measure of litigation-related spending, declined to approximately $131 million. According to AM Best, this represented a 68% fall from 2024 levels and almost an 80% reduction from the peak reached in 2022, following legislative reforms introduced in recent years.
In addition, AM Best said insurers are making greater use of digital technology and data-driven tools to improve pricing accuracy and operational efficiency. The company noted that this has contributed to increasingly competitive market conditions, contrasting with recent years when insurers introduced substantial premium increases in response to market volatility.
