FedNat’s Chief Executive Officer Mike Braun has underlined the continuing challenges posed by Florida’s homeowners market, despite a sharp decline in Assignment of Benefits-related lawsuits.
Speaking on a first quarter earnings call, Braun said overall litigation against property insurance companies in the state continues at levels that are far above the rest of the country.
Whilst legislation aimed at stabilising the state’s marketplace was passed last week, Braun does not believe the issues driving rate increases were fully addressed, and therefore opted to remain cautious, continuing his company’s current initiatives to reduce exposures.
“We’re going to not only hold our line in terms of our in-force premium, but really take it as an opportunity with these rate increases to drop our policies in Florida, having a lower policy count, as well as less exposure, what we call total insured value,” he said.
“In terms of the book of business within Florida, Braun said FedNat is down significantly in terms of policies.
“We’re down significantly in terms of exposures, insured value over the last three years, four years. And that’s going to continue during 2021 until we feel that the rates have more stability in them, relative to our costs.
“So, we think our in-force book, which is about $725 million, will stay somewhat flattened both the portion that’s within Florida, because we’re going to take those rate increases as an opportunity to reduce our policy count.”
Braun concluded that, while he’s seeing some costs stabilisation, he wants to make sure those are permanent and sustainable before the company changes its course of action.
