In the midst of years of tumultuous market conditions, Florida’s homeowners insurance sector seems to be experiencing an encouraging upturn, signaling a possible rebound for the beleaguered industry, according to a recent report by ALIRT Insurance Research.
Over the past few years, Florida’s property insurance market has been grappling with significant challenges, including weather-related losses, a surge in plaintiff’s bar activity, assignment of benefits abuses, and a spate of insurer insolvencies. However, recent data indicates that the situation may be changing for the better.
Citizens Property Insurance Corporation (CPIC), Florida’s largest residual market, has experienced a surge in policy counts over the past two years. According to Citizen reports, policy counts at CPIC reached over one million this month and are expected to climb to 1.7 million by the end of 2023, surpassing the peak numbers from 2011.
The turnaround in policy counts comes amid significant efforts by Florida to reform its property insurance market. Over the period of 2012-2019, the state implemented measures to depopulate the residual market, attracting a host of new privately-owned property insurers.
However, in recent years, the market faced a collapse due to mounting weather-related losses, including Hurricane Ian in 2022, and other issues.
The 6/30 reinsurance renewal period, which was a cause of concern for many, turned out to be more promising than anticipated. Contrary to fears of further evaporation of reinsurance capacity, the renewal period attracted new reinsurance capital with higher rates, stricter terms and conditions, and increased attachment points. This development brought a sense of relief to insurers operating in the state, allowing them to bolster their risk management strategies.
Several positive announcements also contributed to the optimism in the market. A number of new insurers have expressed their intention to enter the Florida market, showing a growing interest in providing coverage to the state’s homeowners.
Furthermore, State Farm, a prominent insurer, announced that it would maintain a “substantial presence” in Florida homeowners, a sign of confidence in the state’s efforts to reform the insurance market.
Another notable trend is the increasing take-out appetite at Citizens Property Insurance Corporation. In the first half of 2023, the total take-out requests surpassed the figures for the entire year of 2022, indicating a growing interest among insurers to assume policies from CPIC.
While challenges persist, the recent developments suggest that Florida’s property insurance market may be at an important inflection point. Market reforms, the return of reinsurance capacity, and the entrance of new insurers have created an atmosphere of cautious optimism for the state’s homeowners. However, it is crucial to recognize that the path to normalcy remains long and uncertain.
In conclusion, Florida’s property insurance market, which suffered from a wave of insolvencies and instability in recent years, appears to have bottomed out and is showing early signs of a potential rebound. Encouraging market reforms and renewed interest from insurers have injected hope into a market that was once fraught with challenges.
As the state continues its efforts to stabilise and revitalise the insurance landscape, all eyes are on Florida’s homeowners to see how these developments will unfold.
