A majority of respondents to a recent survey by Reinsurance News have said they believe that it could take years for the recent property reforms passed by Florida lawmakers to have a positive impact on reinsurance conditions in the state.
Governor Ron DeSantis signed new legislation into law this week following several days of discussions by lawmakers during a special emergency session.
The reforms aim to enact pro-consumer measures that should help to alleviate rising insurance costs, increase insurance claim transparency, and crack down on frivolous lawsuits that have driven up prices in recent years.
But while the changes have received support from the re/insurance industry, there have been concerns about how significantly they will actually alter the litigation landscape and the profitability of Florida property business in the short term.
And this scepticism was reflected in a survey conducted by Reinsurance News earlier this month, undertaken in collaboration with our ILS-focused sister publication Artemis, which found that most market participants expect any new legislation to take upwards of a year to yield any positive changes for reinsurance conditions in Florida.
Out of the hundreds of responses from identifiable market participants, of which 70% make or provide input to reinsurance buying decisions, 37.3% expect Florida market reforms to take one to two years to positively impact reinsurance, while another 16.0% said it will likely take more than two years.
Together, then, a significant 53.3% of respondents expect the changes to take at least a year and possibly multiple years to effect beneficial change for the state’s troubled market.
With just 10.7% of respondents saying reforms could yeild positive impacts within six months, this option was the least popular of those offered to survey participants, but it’s worth noting that more than a third (36.0%) were optimistic that positive change could be observed from six months a year after the reforms are introduced.
Among other key takeaways from the Reinsurance News survey, market participants expressed confidence that reinsurance rate increases will accelerate further at the mid-year 2022 renewals, while buyers of protection will find it challenging to procure the desired level of coverage.
On a similar note, 77% of respondents to the survey believe that some carriers will fail to obtain sufficient reinsurance protection at June 1, in part due to the ongoing challenging conditions in the Florida market.
We’ve made the full results of this global reinsurance market survey freely available to our readers and we’re happy to discuss the results with industry participants and to discuss sponsorship enquiries from those looking to raise their profile in the reinsurance sector. Contact us.