Florida Property Insurers Turn Profit in 2023, Bucking Years of Losses Amid Hurricane Challenges

Florida’s property insurance market, long beleaguered by underwriting losses due to frequent and severe hurricanes, showed a rare profit in 2023. Insurers collectively turned around their fortunes, netting almost $150 million in profits, a stark contrast to the previous years’ losses totaling over $3 billion from 2020 to 2022. This welcome change was attributed to a milder hurricane season, robust investment returns, and recent legislative reforms aimed at bolstering the insurance industry’s health in the state.

The rising insurance costs for homeowners, driven by increased hurricane risks and a dwindling number of private insurers, have been a persistent issue. Citizens Property Insurance Corp., Florida’s insurer of last resort, along with the remaining private insurers, has suffered significant financial setbacks since 2017, culminating in the exit or consolidation of nine insurers between 2021 and 2023. However, 2023 marked a positive shift, partly due to new laws designed to reduce frivolous claims and assignment of benefits abuses, which have historically driven up losses following weather-related events.

Despite this progress, the insurance market’s reliance on Citizens and the need for more private insurers to distribute risk more evenly across the state remains a concern. Florida’s regulatory environment now appears more inviting to new entrants, with six new property insurers approved to start operations in 2024. This development, alongside legislative changes, could herald a more stable and diverse insurance market, crucial for a state grappling with the ongoing threat of hurricanes.