Last week I posted about the worries that the Florida Hurricane Catastrophe Fund may itself be a catastrophe waiting to happen. Now, Jeff Grady the President and CEO of the Florida Association of Insurance Agents has written an article on the issues Florida’s property insurance market is facing and likens the situation to the problems faced by the government mortgage monolith Fannie Mae.
He highlights the potential shortfall that could be faced should a major disaster strike in this article. It seems to me that Florida may have got away with it this season (what with hurricane season ending soon and the worst of this years storms hopefully passed). Florida needs to address this issue before next season to ensure the state has adequate protection and to remove the dependence on credit markets.
A new solution to state-wide catastrophe protection has to be one answer and public-private partnerships seem a likely source of capacity. Interested to hear your opinions on the difficulties the state may face in the future and your ideas of possible solutions. Please comment!