Triple-I: Florida’s Property Insurance Market Improving Due to Legislative Reforms Curbing Legal System Abuse, Fraud
May 08 2024 - 11:03AM
Business Wire
After years of enduring rampant legal system abuse and claim
fraud, Florida’s property insurance market is showing signs of
improvement as the 2024 Atlantic hurricane season nears, according
to a new Issues Brief published today by the Insurance Information
Institute (Triple-I).
Legislative reforms passed in 2022 and 2023 have created a
pathway to a stable Florida market, according to Triple-I’s Issues
Brief. Among the positive actions are 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 being approved by the
state’s regulator to enter the market this year.
“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.
While insurers in Florida recorded an underwriting loss for the
eighth consecutive year in 2023, according to S&P Global, the
loss was much smaller than in recent years. 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.
Despite the market improvements, average Florida home insurance
premiums are expected to continue to increase this year, albeit 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. 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.
ADDITIONAL RESOURCES:
Triple-I Issues Briefs
Addressing Florida’s Property/Casualty Insurance Crisis
(February 2023) Florida Homeowners’ Insurance Crisis (August 2022)
Legal System Abuse
About the Insurance Information Institute
With more than 50 insurance company members — including
regional, super-regional, national, and global carriers — the
Insurance Information Institute (Triple-I) is the #1 online source
for insurance information in the U.S. The organization’s website,
blog and social media channels offer a wealth of data-driven
research studies, white papers, videos, articles, infographics and
other resources solely dedicated to explaining insurance and
enhancing knowledge.
Unlike other sources, Triple-I’s sole focus is creating and
disseminating information to empower consumers. It neither lobbies
nor sells insurance. Triple-I offers objective, fact-based
information about insurance – information that is rooted in
economic and actuarial soundness. Triple-I is affiliated with The
Institutes Risk and Insurance Knowledge Group.
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Florida Press Office: Mark Friedlander, 904-806-7813,
markf@iii.org