Florida Insurance Market Sees Hope Amid Legislative Reforms and Reduced Hurricane Activity

Recent legislative changes in Florida offer hope for the state’s beleaguered property insurance market, which has faced significant challenges due to frequent hurricanes and increased litigation. The Florida Senate Bill 2-A, passed in 2022, aims to stabilize the insurance sector by addressing these issues and stimulating competition.

Matthew Harrell, president of insurance at Franklin Street, emphasized the importance of this legislation for providing affordable insurance to both homeowners and commercial property owners. He noted that insurance carriers in Florida have consistently lost money since 2017, leading to a potential market exit. The "perfect storm" of heightened hurricane activity and a surge in litigation drove these financial difficulties.

Senate Bill 2-A seeks to curb excessive litigation and inflated claims, streamline the claims process, and create a more favorable legal environment for insurers. Harrell highlighted that Florida, while only accounting for 8% of U.S. property claims, was responsible for 79% of total claim expenses, underscoring the need for reform.

The positive impact of these legislative changes is already visible, with more insurers returning to the Florida market and increased operations. The mild hurricane season in 2023 also contributed to the first profitable year for property carriers in seven years. Harrell remains optimistic about continued improvements throughout 2024, with new capacity entering the market and insurance rates beginning to stabilize, providing much-needed relief to clients.