Reinsurance News reports Florida’s first underwriting profit in eight years

The Reinsurance News has announced that Florida's personal property insurance market has recorded its first underwriting profit in eight years, according to AM Best. The announcement was made on the social media platform X.

According to Best's Review, Florida's property insurance market has historically faced challenges such as high litigation costs, frequent hurricane losses, and insurer insolvencies. In response to these issues, reciprocal insurance exchanges have emerged as a viable alternative. These exchanges offer a member-owned structure that aligns the interests of policyholders and insurers. This model has gained traction in Florida, with several reciprocals entering the market to provide stability and capacity in a challenging insurance environment.

As reported by Insurance Journal, in 2024, Florida's personal property insurance sector achieved an underwriting gain of $206.7 million. This represents a significant turnaround from the $174.4 million loss reported in 2023 and marks the first underwriting profit since 2016. The improvement reflects enhanced underwriting practices and the positive impact of regulatory changes. The presence of reciprocal exchanges has contributed to this improvement by introducing alternative risk-sharing mechanisms.

According to The Florida Senate, the improvement in underwriting performance is attributed to recent legal reforms aimed at reducing fraudulent claims and litigation, favorable weather conditions, and strengthened underwriting standards among insurers. These reforms have created a more conducive environment for reciprocal exchanges to operate effectively, offering policyholders more stable and affordable coverage options. As a result, reciprocals have played a role in enhancing the overall resilience of Florida's insurance market.

Reinsurance News is a digital publication providing industry news, data, and analysis related to global reinsurance, primary insurance, and risk transfer markets. It caters to professionals and stakeholders across the insurance sector by offering insights into the operations of reciprocal insurance exchanges. These exchanges have become increasingly prominent in markets like Florida's due to their impact on the insurance landscape.