Florida P&C litigation relatively flat, but AOB claims rising: CaseGlide

Newly litigated property insurance claims at Florida’s largest P&C insurers continue to be relatively flat, with the number fluctuating between 4,000 and 4,700 per month so far in 2022, according to the latest data from CaseGlide.

In July 2022, CaseGlide counted 4,091 newly litigated claims from Florida’s P&C insurer cohort, which is a roughly 4% drop from June’s figure of 4,261.

But June’s figure was over 5% up on May, reflecting the month-to-month fluctuation that is being seen.

Overall, CaseGlide said that July’s figure, “continues a relatively flat pattern of new litigated claims volume between 4,000 and 4,700 since January 2022.”

Out of the 16 largest Florida insurers that CaseGlide regularly monitors, five recported a month-over-month increase in newly litigated claims in July, with one showing an increase of 29% month-over-month and the remaining four showing increases between 1% and 11%.

Again, that shows the difference in experience being seen, which suggests litigation is not yet seeing any kind of meaningful decline in Florida’s property insurance market, despite the legislative actions taken over the last year or so.

Of nine insurers that reported month-over-month declines, six were less than 15%, three were between 30% and 50%, and one, Southern Fidelity, produced no new litigated claims as they were declared insolvent in June. One additional insurer showed no gain or loss for the month, CaseGlide said.

Notices of Intent to Initiate Litigation (NOIs), which can be a sign of forward-trends in litigated case rates, dropped slightly month-over-month from 3,045 in June to 2,986 in July.

There may be an early sign of a flatlining of litigated claims, with perhaps some decline to come. But even if that does happen, the actual monthly numbers would not be expected to be far below what we’re seeing today anyway.

Certainly not the wholesale quashing of insurance litigation practices that Florida’s market really needs to see.

Once again though, the most concerning statistic for insurance and reinsurance markets is related to the percentage of new litigated cases that feature an assignment of benefit (AOB) claim.

AOB cases as a percentage of total new litigated cases rose again in July to 41%, up from 36% in May, and 38% in June.

At this time, CaseGlide said that AOB percentages of new litigation are actually higher than at any time in the past 18 months, which could be concerning for the quantum of claims that come in, as AOB can result in higher claims and therefore higher loss costs for insurance and reinsurance interests.

With AOB rates accelerating, as a percentage of total claims, it does raise the question whether contractors and attorneys are taking advantage of the legislative environment in Florida’s property insurance market before any further action is taken by lawmakers to quell fraud and litigation rates.

Finally,CaseGlide said that Miami-Dade County is still the state leader in percentage of new litigation at 25%, followed by Broward County at 16%, Orange County at 7%, Palm Beach County at 7% and Hillsborough County at 6%.

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