Florida headquartered insurer United Insurance Holdings (UPC Insurance) has said that it anticipates the Florida personal lines property insurance market remaining “very firm for the foreseeable future”.
The carrier had recently explained that the litigation issue and resulting loss inflation and amplification continues for Florida homeowners’ insurers, with its data suggesting that the issue continues to worsen in 2021.
In reporting its first-quarter results yesterday, the insurer revealed further strengthening of reserves due to litigation related loss amplification.
Dan Peed, CEO of UPC Insurance explained, “Due to unusual loss development patterns in February and March, at the end of the first quarter we did an analysis of our exposure to the accelerating litigation trend in Florida. This resulted in a $30 million strengthening of both catastrophe and non-catastrophe Prior Year Reserves for Florida personal lines exposures, driving a core after tax loss for the quarter of approximately $19.4 million.”
The legislative is attempting to remedy the situation with changes to laws designed to attack Florida’s insurance market issues and Peed is positive on the effects this will have.
“We are very encouraged with last Friday’s Florida legislative changes and believe they will mitigate the accelerating litigation trends, although it is too early to quantify the improvement,” he said.
But the current state of the Florida insurance market means more firming is ahead, Peed believes, which suggests reinsurance rates will also remain firm, particularly for those companies that have experienced more loss creep from prior years and the greatest effects of litigation.
Peed commented, “The property catastrophe market remains firm, especially the Florida personal lines market which is expected to remain very firm for the foreseeable future.”