Triple-I: Signs of Improvement in Florida Property Insurance Market After Reforms

Fraught with fraud and litigation abuse, the Florida insurance market is finally showing signs of stabilization amid legislative reforms passed in 2022 and 2023, according to a new Triple-I Issues Brief.

The ongoing depopulation of Citizens Property Insurance Corp., the state-backed insurer of last resort which became the state’s largest home insurer due to the risk crisis, and eight new property insurers approved to enter the market this year are among the positive outcomes of the reforms.

“Property insurers want to do business in a state like Florida which is growing, and there is now some hope that this could eventually happen more and more. However, it is important Florida’s public policymakers ensure the reform that is helping the market recover is not eroded by the billboard lawyers,” said Triple-I CEO Sean Kevelighan. He also warned that plaintiff attorneys are actively working to bring their abuse tactics to other states as Florida now has tighter regulations on filing property claim lawsuits.

The $190.8 million cumulative underwriting loss posted by the top 50 private insurers in Florida last year was a big improvement from the industry’s $1.80 billion underwriting loss in 2022 and $1.52 billion loss in 2021, the Issues Brief noted.

Florida home insurance premiums are expected to continue to increase at a more moderate level than recent years, according to Triple-I.

The Issues Brief noted that some regional insurers recently filed for small statewide average rate decreases.

There are early signs that recent legislative reforms are beginning to bear fruit, the brief noted.

In 2023, Florida’s defense and cost-containment expense (DCCE) ratio – a key measure of the impact of litigation – fell to 3.1, from 8.4 in 2022, according to S&P Global.

In dollar terms, 2023 saw $739 million in direct incurred legal defense expenses – a major decline from 2022’s $1.6 billion.

For perspective, incurred defense costs in the two largest U.S. insurance markets in 2023 were $401.6 million in California, followed by $284.7 million in Texas.