Florida’s strengthening property insurance market
Florida’s insurance commissioner releases another positive update on the property insurance market, insurance-linked securities are on pace to set a record, a new bill in Congress would provide tax deductions on homeowners insurance, plus the new permanent rule on Florida premium tax credits. It’s all in this week’s Property Insurance News.
Strengthening Market: The Florida Office of Insurance Regulation’s (OIR) recent update from Commissioner Michael Yaworsky highlights new developments on the state’s strengthening property insurance market:
- Trident Reciprocal Exchange was just approved as the ninth new carrier since the legislature’s 2022 litigation and consumer protection reforms and subsequent reforms, that among other things, eliminated one-way attorney fees and Assignment of Benefits (AOB) contracts.
- Progressive Insurance and State Farm Insurance have reinforced their commitment to maintain and grow their Florida property business, citing the reforms. Heritage announced its resuming writing new policies.
- The 180-day average request for homeowners’ rate changes as of August 1, 2024 is +1.2%, with 12 companies filing rate decreases and 24 filing zero percent changes. The current 30-day average homeowners insurance request is +0.5%; one year ago, it was +7.6%.
- The 2024 Annual Reinsurance Data Call shows the risk-adjusted change in reinsurance costs decreased on average 1.7% from 2023, which is the first decrease in years.
- The state-backed Citizens Property Insurance Corporation continues to depopulate its policies, moving 132,445 policies back to private market carriers so far in 2024.
Also of significant note: OIR has taken control of its own wealth of data and is starting to market it directly to the insurance consumers of Florida and general public and news media. It has created the Florida Property Insurance Market Stats, Data and Facts webpage to provide the information on Florida’s property insurance market. Bravo – it is worth your investment of a few minutes right now to explore its many sections and easy navigation and consider bookmarking it! OIR notes it collects more data about our insurance market than any other state or regulatory entity.
ILS Market’s Rapid Growth: That confidence in reinsurance risk is reflected in Swiss Re’s new reporting that the insurance-linked securities (ILS) market in on course for a record year in 2024. The year’s first-half new issuance was up 25.5% from the previous year’s first half. It grew from $9.8 billion to $12.3 billion across 49 transactions, including Tower Hill Insurance Group LLC’s $400 million Winston Re 2024-1 covering Florida windstorm.
Premium Tax Deduction: Florida U.S. Senator Rick Scott has introduced the Homeowners Premium Tax Reduction Act that would provide an above-the-line tax deduction of up to $10,000 of insurance premiums for homesteaded properties. You can read more here. Earlier this year, he introduced similar legislation to amend the tax code to provide an above-the-line deduction for flood insurance premiums.
Premium Tax Credits: We recently reported on OIR issuing an emergency rule governing how property insurance companies are to issue various tax credits passed by the Florida Legislature earlier this year. These include the Premium Tax Discount, Fire Marshall Assessment Discount, and Flood Premium Tax Discount. OIR has now completed a workshop required to publish the permanent rule that will replace the emergency rule. The new rule is essentially the same; the title of the three discounts have been shortened. There is also a permanent reporting form for carriers to use, which has little change as well.
LMA Newsletter of 8-19-24
