OIR Issues Update on Florida's Property Insurance Market
Apr 3, 2024
~ Eight property and casualty insurers approved to enter market following legislative reforms ~
TALLAHASSEE,
Fla. - Today, the Florida Office of Insurance Regulation (OIR) issued
an update on Florida’s property and casualty insurance market. Following historic
legislative reforms designed to promote market stability, eight property and
casualty insurers were approved to enter Florida’s insurance market. Ovation Home Insurance Exchange, the most
recent approval, joins Manatee Insurance Exchange, Condo Owners Reciprocal Exchange, Orange Insurance Exchange, Orion180 Select Insurance Company, Orion180 Insurance
Company, Mainsail Insurance Company, and Tailrow Insurance Companies as newly approved
property and casualty insurers.
"Florida's
insurance market continues to strengthen, showing signs recent legislation is
having positive impacts to the property insurance market," said Insurance Commissioner Michael
Yaworsky. "OIR remains steadfast in our efforts to
stabilize Florida's insurance market by implementing legislative reforms and
recruiting more insurers to the state. We look forward to continuing this work
and promoting a competitive market for policyholders."
In
addition to new companies entering the market, OIR approved the acquisition of Florida
domestic property and casualty reciprocal insurer, Trusted Resource
Underwriters Exchange, to allow the existing company to grow its footprint in
the state and expand its underwriting capacity. As a result of OIR’s approval
of the acquisition, more than $1.25 billion of capital is being
invested into Florida’s property and casualty insurance market.
Citizens
Property Insurance Corporation
Citizens
Property Insurance Corporation (Citizens) is showing improvement in their financial strength over
the previous years. For instance, Citizens' surplus increased by approximately
17.5 percent from previous years and Citizens posted a net income in 2023 of
$746 million compared to a loss of $2.2 billion in 2022. Additionally,
Citizens' combined ratio improved from the previous year from 204.4 percent to
59.5 percent.
As the
market continues to stabilize, OIR is seeing a continued interest from authorized
insurers in the Citizens Depopulation program. In 2024, OIR has approved 13
companies to assume more than 354,000 policies from Citizens. In 2023, more
than 275,000 policies were assumed from Citizens, reducing Citizen’s exposure
by more than $113 billion. More information about policies assumed and exposure
removed through the Citizens Depopulation program is available here.
Florida
Domestic Company Strength
In
2023, Florida domestic property insurance companies reported they produced a
combined net underwriting that almost broke even, a dramatic improvement from
losing over a billion dollars in the past three consecutive years. When
combined with investments, these domestic carriers showed a net positive income
in 2023 for the first time since 2016.
Insurers
establish a loss reserve, which is the amount the insurer believes that claims
will cost. At periodic points in time, an insurer goes back and evaluates how
much those claims actually cost and uses that information to inform reserves
going forward. Year end 2023 data reported to OIR reflects a much lower degree
of uncertainty in the property insurance market, as insurers reported lower
loss reserve development.
From
2022 to 2023, Florida domestic insurers, including Citizens Property Insurance
Corporation, have reported a 44.8 percent decrease from $772 million to $398
million in loss reserve development at the two year look-back period and a 28
percent decrease from $224 million to $161 million at the one year mark.
Additionally,
the Florida Hurricane Catastrophe Fund rates are decreasing for
participating insurers by a statewide average of 7.38 percent. These rate
decreases are in part based on modeled loss cost indications, even while
exposure grows.
OIR encourages companies to learn how to become authorized to sell insurance in Florida. Applications are accepted on a rolling basis, and OIR strives to conclude the review process of all complete applications within 60 days of submission. More information is available on OIR’s company admissions page. A full list of new entities approved to enter the Florida insurance market is available on OIR’s website here.
About the OIR
The Florida Office of Insurance Regulation (OIR) has primary responsibility for regulation, compliance, and enforcement of statutes related to the business of insurance and the monitoring of industry markets. For more information about OIR, please visit our website or follow us on Twitter @FLOIR_comm.