Florida’s Property/Casualty Insurance Market Shows Signs of Recovery Amid Reforms

The Florida property/casualty insurance market is beginning to see signs of recovery following several challenging years, buoyed by legislative reforms aimed at curbing legal system abuses and assignment-of-benefits claim fraud. A new Triple-I Issues Brief highlights that while the market is stabilizing, with claims-related litigation and the burden on the state’s insurer of last resort decreasing, homeowners should not expect a significant reduction in premium rates in the near future.

Despite the industry posting its first net profit in seven years, driven by a mild 2023 Atlantic hurricane season and increased investment income, several factors continue to exert upward pressure on insurance premiums. These include rising replacement costs and anticipated hikes in reinsurance costs, expected to impact the June 1 renewals. Mark Friedlander, Triple-I’s director of corporate communications, emphasized that while some regional insurers might offer slight rate decreases, the overall trend for 2024 will see premiums continue to rise.

Florida remains a high-risk state for natural disasters, facing threats not only from an anticipated "extremely active" 2024 hurricane season but also from other events such as wildfires, flooding, and severe convective storms. These challenges underscore the precarious balance of the insurance market in the state, which while recovering, still grapples with significant volatility due to its susceptibility to natural catastrophes and persistent issues such as insurance fraud and litigation.