Progressive Reforms Alleviate Florida’s Property/Casualty Insurance Crisis

According to a recent Triple-I Issues Brief by the Insurance Information Institute, Florida’s property and casualty insurance sector is showing signs of recovery, buoyed by legislative reforms aimed at curbing legal abuses and fraudulent claims related to assignments of benefits (AOB). These reforms, alongside a relatively mild Atlantic hurricane season in 2023, have enabled insurers to post a net profit for the first time in seven years. Despite these positive developments, the sector continues to face challenges, including high policy counts and ongoing litigation managed by the state’s insurer of last resort, Citizens Property Insurance Corpâ€,â€,.

The Triple-I report highlights that in 2023, the top 50 private insurers in Florida reported a significant reduction in underwriting losses, decreasing from $1.80 billion in 2022 to $190.8 million. This improvement is largely due to the legislative measures that have effectively reduced claims-related litigation and, consequently, insurers’ defense and cost-containment expenses. However, the state’s insurance market still faces upward pressure on rates, driven by rising replacement costs and anticipated increases in reinsurance costsâ€,â€,.

The brief also notes the ongoing challenges of managing property claim lawsuits, especially those filed prior to the recent reforms, which continue to strain insurers’ budgets. Citizens Property Insurance Corp., for instance, expects a budget shortfall. Additionally, while Hurricane Idalia was the only major storm to impact Florida in 2023, the Triple-I warns of an "extremely active" hurricane season predicted for 2024, emphasizing the need for continued vigilance and preparednessâ€,â€,.