Insurance Daily News

Florida Property Insurance Market Faces Historical Turbulence

Florida’s property insurance sector has experienced substantial instability over the last decade. Between 2017 and 2024, 10 insurance carriers faced insolvency. An additional 10 companies were removed from the market through "shadow insolvencies," which involved consolidations within holding company families or controlled runoffs to manage financial distress.

This market volatility led to significant financial pressure on residents. Homeowners' insurance premiums grew to consume approximately 10% of household income for many Floridians. When combined with high auto insurance rates, total insurance expenses reached nearly 15% of household budgets. The resulting environment caused capital to become scarce and expensive, while reinsurers withdrew from the state.

Art Randolph, Principal and Consulting Actuary at Pinnacle Actuarial Resources, identified the assignment of benefits issue as a primary factor that plagued the market and evolved over time.

For industry stakeholders, these figures highlight the severe impact of market volatility on consumer affordability and carrier solvency, underscoring the critical need to monitor how systemic issues like assignment of benefits affect long-term market stability.

Why it matters

Understanding the scale of carrier insolvencies and the resulting impact on household budgets is essential for assessing the stability of the Florida property insurance market.

FAQ

How many insurance carriers became insolvent in Florida between 2017 and 2024?
Ten carriers became insolvent outright, while an estimated 10 more disappeared through shadow insolvencies.

What percentage of household income did homeowners' insurance premiums reach for many Floridians?
Premiums began consuming approximately 10% of household income.

What factor did Art Randolph identify as a primary issue for the Florida market?
Randolph pointed to the assignment of benefits issue, noting that its evolution over time plagued the market.

Source: Risk & Insurance. See the original source for full details.