Gallagher Re on the state of the Florida market

Gallagher Re’s annual Florida Market Watch Report for the yr ending 2023 highlights the state of the insurance coverage panorama in Florida, specializing in firms with a big presence within the state’s private property market.

The report, drawing information from NAIC statutory statements by way of S&P International Market Intelligence, outlines varied metrics of efficiency, together with premium development, profitability, surplus, new firm formations, and coverage take-outs.

When it comes to premiums, 2023 noticed an general enhance throughout all subgroups in comparison with the earlier yr. The ANTS subgroup, which incorporates main insurers like Allstate (Citadel Key firms), Nationwide, Vacationers (First Floridian), and State Farm, skilled 19% development in direct premium written (DPW), reaching $2 billion.

This surge was largely attributed to State Farm. The Florida Specialists subgroup witnessed a 15% enhance in DPW, amounting to $22.7 billion, with American Strategic and Privilege Underwriters driving a lot of this development.

Moreover, Residents, the state-run insurer, reported a notable 59% enhance in DPW to $5.1 billion in 2023, fueled by an uptick in insurance policies in drive.

Progress in profitability

On the profitability entrance, 28 out of the 57 firms monitored reported underwriting positive aspects in 2023, an enchancment from 15 firms in 2022. Regardless of this, the Florida Specialists subgroup confronted a web underwriting lack of $398.3 million and an after-tax web lack of $9.5 million.

Conversely, the ANTS subgroup achieved a modest web underwriting achieve of $0.6 million and an after-tax web revenue of $24 million.

Total, the market’s web underwriting revenue stood at $68.8 million, with after-tax web revenue at $760.9 million—largely contributed by Residents with an after-tax web revenue of $746.5 million. The mixed ratio for the market additionally improved markedly to 96.7% in 2023 from 133.9% in 2022.

The report additionally highlighted 15.6% development in policyholders’ surplus throughout the market to $12.2 billion in 2023. Notably, Residents’ surplus rose by 17.4% to $5 billion, and the Florida Specialists’ surplus elevated by 16.7% to $6.1 billion, with web additions together with capital inflows and surplus notes totaling $865.7 million.

Relating to new market entrants, the Florida Workplace of Insurance coverage Regulation permitted 5 new firms for 2024, aiming to diversify the state’s property insurance coverage choices.

Moreover, the take-out course of noticed vital exercise in 2023, with 646,617 insurance policies permitted for removing from Residents, highlighting efforts to redistribute insurance policies to the personal market and scale back the state insurer’s publicity.

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