risk transfer

Florida’s Legislature made progress on some of the property insurance reform bills that were heard by a committee yesterday, moving them on to the Senate, but the details underlying the reforms will matter for the reinsurance market and the prospects of meaningful change.

Driving home the seriousness of the situation in Florida’s property insurance market today, the sponsor of one of the bills being discussed at the special legislative session in Tallahassee said on the floor that some carriers in the state are “on life support.”

Industry contacts have been raising concerns over the weekend, that proposed property insurance related legislation set to be raised during Florida’s special session of the legislature this week will not go far enough on litigation and won’t do enough to bring reinsurance market confidence back to the state.

The Governor of Florida Ron DeSantis expects the special session of the legislature will deliver “really significant reforms” to Florida’s property insurance sector, that he believes can stabilise the marketplace there.

Having previously warned that the Florida insurance market has spent the last 30 years kicking the can of its problems down the road, a road that is now running out, ALIRT analysis now suggests the market is at a “flash point” moment, where it risks reinsurance capital pulling-back even more significantly.

Florida’s lawmakers are set to focus on affordability of property insurance for citizens of the state at the upcoming Special Session, with tackling fraud and abuse of assignment of benefits (AOB) both key areas to reform, according to the states CFO Jimmy Patronis.

As the Florida market continues to grapple with its challenges, even with the promise of some legislative change being on the horizon through the upcoming Special Session, still carriers are pushing hard for steep rate rises in order to restore profitability.

The Florida property insurance market crisis that has unfolded through recent years won’t be fixed by minor reforms to the Florida Hurricane Catastrophe Fund (FHCF), according to Demotech President and Co-Founder Joseph Petrelli.

The number of litigated property insurance claims at Florida’s largest P&C insurers rose again in the month of April 2022, with the total now back at levels only seen prior to the enactment of the SB76 reforms, according to CaseGlide.

Commenting on the potential for legislative reform in the challenged property insurance market of Florida, RenaissanceRe CEO Kevin O’Donnell remarked that a reduction in the FHCF attachment point will change nothing for his reinsurance firm’s view of risk in the state.