Plus other insurance news and thoughts
The Florida Office of Insurance Regulation (OIR) has given tentative approval to a slightly larger workers’ compensation rate decrease for 2019. OIR late Friday issued an Order notifying the National Council on Compensation Insurance (NCCI) that its 2019 rate filing proposing a 13.4% decrease, if amended by this Wednesday, will be approved at a larger decrease of 13.8%.
The Order includes a requirement to lower the allowance for profit and contingencies and requires that future rate filings include a detailed explanation and quantitative analysis on the impact the 2016 Florida Supreme Court decision Castellanos v. Next Door Company is having on the state workers’ comp market and include the data used to support future rate filings. Fears that Castellanos and other recent Supreme Court decisions would create upward rate pressure haven’t yet materialized. NCCI represents about 250 workers’ comp writers in the state.
OIR wrote that even after considering the impact of the Castellanos and other court decisions, other factors at work in the marketplace combined to contribute to the rate decrease, including declines in claims frequency, reduced assessments, and increases in investment income. Approval of a revised rate decrease, once filed and approved by OIR, would become effective on January 1, 2019, for new and renewal business.
I was privileged to attend and present at the Florida Sunshine Chapter conference of the Insurance Accounting and Systems Association (IASA) in Tampa recently. In the audience were financial services and analytics experts, operations and systems team members, and everyday foot soldiers that make insurance companies hum.
One of the attendees asked a very profound question: What are the emerging markets in the insurance industry?
Joe Petrelli, President of Demotech, took the lead on the answer and a robust discussion ensued about crop insurance and flood insurance. He said both sectors are full of opportunity but was steadfast in his point that while the federal government can have a role in the necessary transfer of risk, the private market is better suited and should be primary in that regard.
Meanwhile, the market for homeowners insurance certainly keeps growing in Florida. Florida home sales were up again in the third quarter. As a matter of fact, all indicators were up. Florida’s housing market had more sales, higher median prices, more pending sales, and more new listings in the third quarter of this year, according to the latest data from the Florida Realtors®. Sales of single-family homes statewide totaled 72,843 in the third quarter, up 7.5% from the third quarter of 2017.