Florida insurance companies report profits as crisis hits residents
Florida insurance companies report profits as crisis hits residents

Florida home insurers turned a profit for the first time in seven years in 2023, according to an analysis by S&P Global Market Intelligence, despite the insurance crisis still unfolding in the state.

The report, released by S&P Global Market Intelligence this week, showed the group of about 50 insurers operating in Florida made $147.3 million in net income last year, thanks to “significant growth in investment income and much better insurance results’. In 2021 and 2022, the group reported net losses of more than $1 billion each year.

The group analyzed did not include Florida’s insurer of last resort, Citizens Property Insurance Corp., which has dramatically increased the number of policyholders in the past few years as many private insurers have left the state or scaled back their offerings.

Newsweek S&P Global Market Intelligence was contacted for comment by email on Tuesday.

Florida, Miami housing
A plane flies over Miami apartment towers in Miami, Florida on January 20, 2022. Florida insurers said they turned a profit in 2023 after seven years of losses.

CHANDAN KHANNA/AFP via Getty Images

The Sunshine State is experiencing a crisis in its domestic insurance market. According to the Insurance Information Institute (Triple-I), the average homeowner’s insurance premium in Florida is $6,000, the highest rates in the country and a 42% increase from 2022.

The increase in premiums is due to several factors, including excessive litigation, widespread fraud and an increased risk of more severe and more frequent devastating weather events due to climate change. The increased risk of hurricanes and other natural disasters in Florida has led many private insurance companies to withdraw or limit their policies in the state as they expect to pay more claims than they can make in profits.

That left Florida homeowners with limited options, with many forced to find coverage with state citizens — a less-than-ideal solution for the state, which would have to cover a huge number of damage claims if a disaster were to occur.

Against the background of the crisis, the profit of home insurers in Florida in 2023 is surprising, but according to the analysis of experts from S&P Global Market Intelligence, this is mainly due to pure luck.

“Florida property insurers benefited from a mild hurricane season and a significant increase in investment income in 2023,” the experts wrote. “While the industry is still recording an underwriting loss, it is much smaller than in recent years and there are early signs that recent legislative reforms will benefit the troubled market.”

In 2023, Florida’s insurance industry reported collective underwriting losses of $190.8 million – performing slightly better than 2022 and 2021, when they reported losses of nearly $1.80 billion and $1.52, respectively. billion dollars.

But experts at S&P Global Market Intelligence also wrote that the results obtained by insurers in 2023 were “early signs that the introduced legislative reforms” “will benefit the troubled market”.

State regulators recently approved six new property insurers, which are expected to begin writing policies in the first quarter of the year, potentially easing the growing burden on residents.

Are you a Florida homeowner struggling with your property coverage? Have you noticed a positive change in recent months? Tell us about your experience by contacting [email protected].