Legislative reforms put in place in 2022 and early 2023 to handle authorized system abuse and assignment-of-benefits declare fraud in Florida are starting to assist the state’s property/casualty insurance coverage market get well from its disaster of current years, in keeping with a new Triple-I Issues Brief.
Claims-related litigation is down, the “depopulation” of the state’s insurer of final resort continues apace, and underwriting profitability – whereas nonetheless in damaging territory – has improved considerably. Insurers additionally benefited from a comparatively delicate 2023 Atlantic hurricane season and a significant enhance in funding revenue, posting a web revenue for the primary time in seven years.
But it’s essential to do not forget that the disaster wasn’t created in a single day and that it’ll take time for the reforms and different developments to be mirrored in policyholder premiums. Homeowners mustn’t count on their charges to say no in 2024, regardless of the improved trade efficiency, though some regional insurers have filed for small decreases.
“Rates may moderate some compared to prior years,” mentioned Mark Friedlander, Triple-I director of company communications, “but rising replacement costs – combined with expected higher reinsurance costs for the June 1 renewals – are going to continue to drive average premiums upward in 2024.”
One issue preserving upward strain on charges is fraud and authorized system abuse. With solely 15 % of U.S. householders insurance coverage claims, the state accounts for almost 71 % of the nation’s householders claim-related litigation, in keeping with Florida’s Office of Insurance Regulation.
There are early indicators that current legislative reforms are starting to bear fruit. In 2023, Florida’s protection and cost-containment expense (DCCE) ratio – a key measure of the affect of litigation – fell to three.1, from 8.4 in 2022, in keeping with S&P Global.
But the catastrophe-prone state faces quite a lot of pure challenges, from a projected “extremely lively” 2024 hurricane season to wildfires, flooding, and extreme convective storms.
“Hurricanes get the most media attention,” Friedlander mentioned, “but severe convective storms inflict comparable losses. And it only takes one bad hurricane season to wipe out the benefits of one or more mild years.”
Learn More:
2024 Wildfires Expected to Be Up From Last Year, But Still Below Average
CSU Researchers Project “Extremely Active” 2024 Hurricane Season
Lee County, Fla., Towns Could Lose NFIP Flood Insurance Discounts
FEMA Reauthorization Session Highlights Importance of Risk Transfer and Reduction
Triple-I “State of the Risk” Issues Brief: Hurricanes
Triple-I “State of the Risk” Issues Brief: Flood
Triple-I “State of the Risk” Issues Brief: Convective Storms
Triple-I “State of the Risk” Issues Brief: WildfireTriple-I “State of the Risk” Issues Brief: Legal System Abuse