During an interview with AM Best TV at the annual Artemis ILS conference in New York on February 10th, Adam Schwebach, executive vice president, Gallagher Re explained how we are starting to see “the tide turn” within Florida’s insurance market.
During the interview, he explained that current local market conditions, as well as the claims market post hurricane Irma, has caused for reinsurers in Florida to “step back and pause” as the market has been hardening significantly.
Schwebach was asked how he would describe the Florida reinsurance market both pre and post hurricane Ian, he stated that the claims environment has not been favourable, which ultimately has led to a lot of talk on the legislative side.
He also said how this has caused for reinsurers to take a “hard look” at how they approach Florida and the underwriting response.
When asked a question regarding Florida Governor Ron DeSantis signing into law the property insurance reform bill, and how it will impact the reinsurance market, as well as renewals this year, Schwebach stated that what was signed by DeSantis back in December 2022 was “fantastic” and that it had reinsurers and reinsurance in mind when it was done.
“So, there’s three major components to it. The first two are very much claims related, so that’s going to deal with assignment of benefits, so that’s basically been taken off the table, nobody can assign benefits anymore. And then there’s something known as the one way attorney fee statute, which has also been taken out. That is something that if you talk to people that have worked in Florida for a while, they never thought that would go away, and that is like completely environment changing for reinsures.”
For the third component, Schwebach explained that they have greatly reduced the amount of time that people have to file a claim.
“How do I think that will impact the reinsurance market? Reinsurers feel good about these changes, but their comments have to me been, we need to see how this plays out first. Now I think that there could be the psychological factor where somebody says okay, we kind of think things are looking better, let’s deploy a little bit more, but I think we’re going to need to see a little bit of time and a little bit of evidence before reinsurers really jump back into Florida with both feet.”
He continued: “So what other factors will have an impact on renewals this year? I think there’s a number of factors, you know, that we will need to deal with the impact of Hurricane Ian for individual companies and everybody’s experience is going to be different.
“But I think in general, there’s a feeling that we’re starting to see the tide turn, that there’s a period now where if the insurance carriers can get their loss numbers under control, they can return to profitability, and hopefully over that period of time as well, reinsurers get comfortable with the reinsurance they’re providing, which we think brings back more capacity and in time should hopefully lower the prices.”
Watch the full video below:
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