Florida’s Personal Property Insurance Market Stabilizes
Florida’s personal property insurance market is undergoing a significant transformation, showing signs of stabilization after a period marked by volatility and substantial premium increases. According to a report by AM Best, the state’s property/casualty sector is witnessing increased competition, new market participants, and moderating premiums. Notably, the segment reported an underwriting profit in 2024, ending eight consecutive years of losses.
In 2024, Florida personal property insurers collectively recorded an underwriting profit of $206.7 million, a significant shift from a $174.4 million loss the previous year. The sector also achieved a pre-tax profit of $492.3 million. This improvement follows a prolonged period characterized by hardened market conditions, including substantial premium hikes and declining capacity.
Legislative reforms introduced in 2022 played a crucial role in this development. Senate Bill 2A, enacted in December 2022, removed the statutory attorney’s fee-shifting provision for residential and commercial property lawsuits. This adjustment aimed to reduce the volume of insurance litigation that had been a major cost driver for Florida insurers. AM Best noted that these reforms not only benefited existing insurers but also encouraged new companies to enter the market, expanding capacity and altering the competitive landscape.
Challenges in Florida’s Insurance Market
The market has faced significant challenges, leading to several insurer insolvencies over the past few years. Between 2021 and 2022, eight major homeowners’ insurers became insolvent. However, only one insolvency occurred in early 2023, indicating a potential shift as rate increases took hold and premiums rose.
The reforms have also led to a notable decline in defense and cost-containment expenses (DCCE). According to AM Best data, Florida’s DCCE ratio fell to 3.1 in 2023 from 8.4 in 2022. This decrease reflects a reduction in litigation-related costs, historically a significant burden on insurers’ operating performance.
Efforts to Depopulate Citizens Program
The growth of Citizens Property Insurance Corporation, the state’s insurer of last resort, has been significant, with its policy count growing by over 150% between January 2021 and September 2023, surpassing 1.4 million policies. To address the potential financial risk associated with this growth, Citizens operates a depopulation program to transfer policies to private insurers and manages a reinsurance program to protect its surplus.
In 2024, Citizens secured a $3.564 billion reinsurance tower, comprising $1.6 billion in catastrophe bonds and nearly $1.3 billion from insurance-linked securities and collateralized markets. For 2025, the corporation plans to obtain $4.54 billion in private reinsurance.
As of April 2025, depopulation efforts have removed more than 152,000 policies, lowering exposure by over $60 billion. Citizens reported approximately 841,470 policies in force as of March 31, a 40% reduction from the peak in September 2023.
Josie Novak, senior financial analyst at AM Best, noted that Florida’s legislative reforms helped longstanding insurers and attracted new market entrants, expanding capacity. “Additionally, the retreat of certain carriers – whether through reduced market participation or the suspension of new business – has created space for new companies to establish a foothold, further reshaping the competitive landscape,” Novak said.
