The Florida residential property insurance industry has returned to profitability in 2024, according to a report by global credit agency AM Best. This turnaround follows nearly a decade of financial difficulties and is attributed to legislative changes made in 2022. The reforms, which made it more challenging to sue insurance companies successfully in Florida, have been credited with revitalizing the market.
Industry Performance
AM Best analysts noted a significant improvement in the industry’s financial performance. Active Florida property insurers reported a combined ratio of 93.1 for 2024, resulting in an underwriting gain of $206.7 million, compared to a $174.4 million loss in 2023. The pre-tax operating income reached $492.3 million, a substantial increase from the previous year’s near breakeven result.
Impact of Legislative Changes
“Florida’s legislative reforms acted as a material tailwind for longstanding participants but also improved the environment to attract new entrants, effectively increasing capacity,” said Josie Novak, Senior Financial Analyst at AM Best. The changes have created opportunities for new insurance companies to enter the market, further reshaping the competitive landscape.
Effect on Citizens Property Insurance Corp.
Even Citizens Property Insurance Corp., the state-run insurer, saw positive financial results. Although Citizens slightly reduced its policy count from 1.23 million in 2023 to 1.18 million in March 2024, its total direct premiums increased by 53% to over $5 billion in 2023, as reported by S&P Global Market Analysis.
The legislative developments have not only improved the financial standing of insurance companies but also enhanced the overall environment for the industry in Florida. As the new Hurricane Season begins, the industry’s improved profitability is a welcome development for both insurers and policyholders.
