Florida Property Insurance Market Profitable – Barely
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Original Article (03/25/24): Lisa Miller Associates
RATE INCREASES CONTINUE
Florida’s domestic property insurance companies show a positive net income for the first time in seven years, another carrier is scheduled to go before regulators seeking a rate increase, Citizens Property Insurance answers to Congress again, and last year’s catastrophic weather not only produced more claims but more customer dissatisfaction, too. It’s all in this week’s Property Insurance News.
Florida Market Back in the Black:
S&P Global Intelligence has been culling the latest NAIC data and reports that Florida’s 50 or so domestic residential property insurance companies collectively showed positive net income in 2023 of $147.3 million. It follows seven years of negative net market income, including losses of more than $1 billion each in 2021 and 2022. S&P credits “a significant swing in investment income and much improved underwriting results” from a mild hurricane season for the change. The figures do not include state-backed Citizens Property Insurance.
The companies’ collective investment income of $346.5 million, more than the previous two years combined, was enough to offset collective underwriting losses of $190.8 million in 2023. That is a marked improvement over underwriting losses of $1.8 billion in 2022, $1.5 billion in 2021 and $1 billion in 2020. S&P’s article contains some additional insight on impacts of tort reform and other factors.
Another Company Seeks Rate Increase: Another one of Florida’s domestic carriers, Cypress Property & Casualty Insurance Company of Jacksonville, will go before regulators at a public rate hearing scheduled for April 3 at 2:30pm. The carrier is seeking a statewide average 18.7% increase in its Homeowners Multi-Peril for Condo Owners (HO-6) policies. The use-and-file submission request is for new and renewal business effective September 9, 2023 and impacts about 7,300 existing policies. This follows recent hearings on increases sought by Amica Mutual, Castle Key, and American Traditions.
Battle of the Press Releases: Governor DeSantis’ recent comment on CNBC that the Florida taxpayer-backed Citizens Property Insurance Corporation is “not solvent” has reignited one U.S. Senator’s interest in Citizens. Senator Sheldon Whitehouse (D-Rhode Island) who Chairs the U.S. Senate Budget Committee said “Citizens has failed to cooperate with our investigation,” in a press release last week. Whitehouse acknowledges Citizens answered the committee’s November 2023 inquiry on how the carrier can levy assessments if needed to pay future catastrophe claims, but didn’t answer whether Citizens or the state of Florida “would turn to the federal government for a bailout.” Citizens President & CEO Tim Cerio in a statement last week to the Insurance Journal, said “We believe we fully addressed the concerns raised in Chairman Whitehouse’s prior letter…(and) we can think of no scenario” that would require a rescue by the government, he added. We applaud Tim Cerio for his clear message: the data is available, questions have been answered, and it’s a distraction to answer redundant inquiries.
Higher Claims/Lower Satisfaction: Last year’s record-breaking 28 catastrophic weather events across the U.S. with nearly $93 billion in total damages took a big hit as well on insurance customer satisfaction. J.D. Power’s 2024 U.S. Property Claims Satisfaction Study showed the large number of high-severity claims caused customer satisfaction to fall to a seven-year low, with slower processes – from estimating, claims payment, and repair – all negatively impacting satisfaction.
“When claims last less than three weeks, satisfaction improves, so it’s the longer claims that are solely responsible for the decline,” said Mark Garrett, Director of Claims Intelligence at J.D. Power. “Insurers are challenged to manage expectations and proactively communicate during longer claim periods as customers tend to have more questions when experiencing delays.”