KBRA releases research discussing positive trends for Florida homeowners insurers which led to higher premium volumes, lower loss ratios, and growth in policyholder surpluses in 2023.

After several years of significant catastrophe (Cat) losses exacerbated by a hyper litigious environment, many Florida homeowner insurers entered 2023 with weakened balance sheets. The 2023 hurricane season closed with above-average storm activity overall, although landfalls were fairly limited compared to prior years, which mitigated claim frequency and overall losses. Aided by favorable tailwinds of significant, groundbreaking legislative reform and a relatively benign hurricane season, KBRA-rated Florida homeowners carriers generally benefited from significantly higher policy pricing which generated underwriting gains and contributed to modest surplus growth. However, sharply higher reinsurance costs dampened profitability for primary carriers.

KBRA will closely monitor industry developments, reinsurance trends, and hurricane activity through the next season as many market participants remain positioned for growth.

Key Takeaways

• The availability and affordability of reinsurance continues to pose a challenge to carriers who have become more creative in finding solutions to complete their programs.
• The legislative reforms implemented at the end of 2022 have helped to reverse the prior deterioration in the capital positions of Florida homeowner insurers, largely due to significant declines in litigated claims and loss cost trends.
• The relatively benign 2023 hurricane season benefited insurers; however, early indications for 2024 suggest the potential for increased frequency and severity of hurricane activity, which could expose insurers to greater erosion of financial strength.

Click here to view the report.

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About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

Doc ID: 1002826

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