Plus, why some people are giving up insurance
Gallagher Re says Florida’s recent legislative reforms led to more available and affordable reinsurance this hurricane season, new hurricane models are making their debut, plus a survey finds a sizeable number of Americans are scrimping on insurance to make ends meet. It’s all in this week’s Property Insurance News.
Florida Reinsurance: In its new report, 1st View: Challenging the Status Quo, Gallagher Re credits the legislature’s 2022 and 2023 insurance marketplace reforms for giving reinsurance brokers the needed confidence to offer more and better-priced reinsurance to our Florida property insurance companies this hurricane season. The worldwide broker said there was an overall risk-adjusted price decrease of -10.7% at the June 2025 reinsurance renewals, with decreases at all layers. The average decrease on low layers was -9%, mid layers fell by -12%, and upper layers by as much as -20%, as “supply kept pace with increased demand in a decreasing rate environment.”
“The shift in the market was particularly evident in Florida, where recent legislative reforms have played a crucial role in transforming the risk landscape,” per the report. “These reforms have successfully reduced property litigated claims by a substantial margin, creating a more predictable and stable environment for insurers and reinsurers alike.” Gallagher Re noted that last fall’s Hurricane Milton was a “real-world scenario” that tested the effectiveness of Florida’s reforms.
In another sign of our recovering insurance market, the Governor has signed HB 5013 that reduces the state-created Reinsurance to Assist Policyholders (RAP) Program from $2 billion to $900 million, to reflect RAP’s current usage to this point; and repeals the Florida Optional Reinsurance Assistance (FORA) Program, including $1 billion in funds that were never used by insurance companies.
New Hurricane Models: It’s out with the old and in with the new at the Florida Commission on Hurricane Loss Projection Methodology. The models that insurance companies have been using under the commission’s 2021 standards are due to expire in November. Verisk has announced that its Verisk Hurricane Model for the U.S. (Version 3.0.0), part of its upcoming Touchstone® 2025 release, has been approved by the commission. It’s among the first new models to meet the commission’s latest 2023 standards for hurricane and flood models. The commission currently accepts models from seven vendors.
Price of Insurance: While Florida’s property insurance rates are on the decline, many other areas in the U.S. continue to see rate increases. With accumulating inflation over the years, some Americans are cutting their insurance coverage now to make ends meet. A new report by the online insurance agency Guardian Service, based on a survey of 1,000 U.S. consumers, shows that nearly one in four (24%) have downgraded or dropped insurance to free up cash. The most popular cutback is in car insurance at 15% of respondents, with 8% of that total dropping full coverage for liability only coverage. One in three said they would go without insurance coverage temporarily to free up funds for necessities. Among the report’s other findings: 35% have delayed or canceled plans for a big purchase this year, including a home (22%), a car (8%), or both (5%); and more than 1 in 10 (12%) have downsized their “dream home” goals due to inflation.
LMA Newsletter of 7-14-25
