Reinsurance, education & PIP
Even with the Governor’s expected signature on property insurance reform, the bill’s effects will take 12-24 months to make their way through carriers’ books of business. In the meantime, some companies are reducing their Florida business to reduce the impact of increasingly expensive catastrophic reinsurance at this June 1 renewal period.
Reinsurance: Bob Warren, Client Services Manager at ratings firm Demotech, is reported in a recent S&P Global article as saying that companies were either jettisoning policies outright or repositioning their portfolios away from areas in the state that their models calculate would lead to bigger reinsurance bills. “Warren in an interview said a majority of companies that Demotech covers, which accounts for around two-thirds of the Sunshine State’s residential property insurers, are trying to cut their reinsurance costs by reducing exposure,” according to the article.
Meanwhile, the latest reporting from the insurance trades is that the June 1 reinsurance renewals, heavily utilized by Florida insurance companies getting ready for hurricane season, are facing increases of between 5% and 15%. But this is less than what was originally forecast this past winter, based on contract signings in April and May that came in with lower than anticipated increases.
Consumer Education: The effort to stem another driver of increased insurance costs and rates – exaggerated and fraudulent claims – continues. Insurance companies have stepped up their communication with policyholders, warning them about door-to-door solicitation and Assignment of Benefits (AOB) contracts. The group Floridians for Lawsuit Reform continues its education efforts, too. It has posted the graphic at right on LinkedIn and other social media explaining that a homeowners insurance policy is not a warranty policy!
PIP Status: Another bill that we’re awaiting formal presentation to the Governor is SB 54, which would repeal the Personal Injury Protection (PIP) coverage requirement of Florida’s no-fault auto insurance law. Governor DeSantis was quoted in media reports last week as saying he is facing pressure from both sides of the issue. He hasn’t indicated whether he will sign or veto the legislation. (You can read more about the bill in our 2021 Bill Watch.) Various insurance interests have been urging a veto.
LMA Newsletter of 6-1-21
