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Florida Insurance Market Update

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Red ink and high alert

There are more outward signs that Florida insurance regulators are getting more actively involved in trying to resolve current challenges to our property insurance marketplace.  Rising reinsurance costs from claims creep and rampant litigation costs have combined to force many companies to increase their rates and some to cut back on their policy count or get out of the market altogether.

The Florida Office of Insurance Regulation (OIR) last week approved a plan to allow Homeowners Choice Insurance to provide replacement policies for Anchor Insurance Company policyholders as part the carrier’s buyout of Anchor.  It affects about 43,000 policyholders throughout Florida.  Regulators appear to be doing their best to provide soft landings for consumers and this is the latest in their facilitation of insurance company mergers.

The Sun-Sentinel published a story last weekend, Watch out, homeowners. Your insurance rates are about to jump., that quoted my sentiment that insurance companies aren’t equipped to withstand the volume of lawsuits – many of them from non-weather water claims.  “The red ink all over the financials of these insurance companies is dire,” they quoted me.  “It’s going to continue to hurt our consumers unless we do something about it.”  This story was carried in Florida Trend and several other major publications, which should put regulators on high alert of further market deterioration.  It’s why I’ve been testifying at recent OIR rate hearings.  Are legislators and regulators taking this problem seriously enough?

Meanwhile another reminder – it now seems weekly – that reinsurance costs will rise steeply at June renewals and beyond.  The global insurance and reinsurance group QBE reported last week that its hurricane claims could rise 50% and may make premiums unaffordable.  Reinsurance rates rose upwards of 25% in Florida in 2019 and are expected to increase another 20%-30% in 2020.

And another reminder that entire “schools” exist to try to game the claims adjusting system as evidenced by this YouTube video posted by “AdjustingSchool” including how to “set the claim up for a lawsuit “ (at the 1:39 mark).   Cynical at best my friends, criminal at worst.  Thank you to one of our readers who shared this.

OIR last week issued its previously announced Data Call to property insurance companies writing both residential and commercial policies in Florida.  This is essentially a “Pre-Data Call” to help determine the state of the insurance market, both before and in the nine months since the legislature’s Assignment of Benefits (AOB) reform that became law last July 1.  The law requires OIR to issue a data call report by January 30, 2022, and each year afterward, with specified data on claims paid in the prior year under AOBs.

Meanwhile, OIR is working on another data call from mid-December and the results are expected in the next few weeks.  An industry report noted OIR is reviewing the data as part of confidential, targeted market conduct examinations on 12 insurers related to Hurricane Michael claims handling practices.

LMA Newsletter of 2-24-20

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Tags: Assignment of Benefits, Florida Insurance Market, Florida insurance rates, Florida Office of Insurance Regulation, Florida Reinsurance, Insurance Fraud

“Great article on Risk Rating 2.0!”

Austin Perez, Senior Policy Representative for Federal Housing, Valuation, Insurance and Commercial Issues
National Association of Realtors
Washington, D.C.

“I have followed your weekly newsletter and podcasts and now have a full appreciation for what you bring to this industry.  You are an inspiring force, plain and simple.  I wanted you to know that you make a difference.  Thank you for all you do!”

Jeffrey Karam, CPCU
Bradenton, FL

“Thank you Lisa for staying on top of, as well as advocating, for Florida residents and legislative reform. Your newsletters are very informative and enjoy reading the points of view.”  

Shawna Miller, Sr. Claims Quality Assurance & Compliance Manager
Florida Peninsula Insurance Company
Jacksonville, FL

“Your newsletter is fabulous!  I greatly appreciate the topics you expose, so that insurance professionals like myself can keep up with the latest events that affect the public we serve and ourselves.”

Cynthia Hoehn, Independent Property & Casualty Personal Lines insurance agent
Clermont, FL

“Just wanted to say that I thoroughly love your newsletter. It’s is always informative and insightful to the ins and outs of our industry.  You are an inspiration and an important asset in the insurance world.  Keep up the great work!” 

Cynthia Scott, President
University Insurance Group
Davie, FL

“Lisa Miller is a true champion for the insurance industry, with her regular updates! We appreciate all you do and keeping us up to date on priority issues!”

Gillian Lloyd, Account Executive
Zywave
Milwaukee, WI

“Lisa this is another great newsletter, and we appreciate the time and energy you put into these informative updates – you are on top of these topics!”

Mike Graham, CEO
Smart Vent Products, Floodproofing.com, & Risk Reduction Plus
Juno Beach, FL

“Another great Newsletter on Florida industry this week.  Your service and advocacy in Florida is very important to keeping me updated and apprised of the Florida insurance laws, trends and overall environment.  Something similar is very much needed in Louisiana, too.”

Jennifer Tedesco, Esq., Claims Director
Pharos Claims Services
Orlando, FL

“Just a quick note to let you know how much I have appreciated your newsletter over the years and the assistance they offer for those in the field of claims. We depend on the information more than you will ever know!”

Laurie Rasberry, Chief Claims Officer
Acorn Claims
Prosper, Texas

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