Financial Strength

The Florida homeowners’ insurance market has rebounded from the devastating hurricanes of 2004 and 2005. During the decade-plus years when national insurers fled the state, members of the Florida Property & Casualty Association have filled a need critical to the state’s economic growth.

In terms of the 57 Florida homeowners writers currently reviewed and rated by Demotech, at June 30, 2015, these companies have a combined surplus of $3.9 billion and carry combined first-event catastrophe reinsurance limits of approximately $25 billion. Reinsurance coverage for a second event after a large first event that exhausts the Florida Hurricane Catastrophe Fund is $15.9 billion. Coverage for subsequent events has also been purchased by these companies.

Put another way, if a catastrophic hurricane roughly the size of Hurricane Andrew were to hit Florida, insured losses would total about $10 billion. But because of their reinsurance resources, Florida domestic companies could pay all claims and through their access to reinsurance could meet claims from additional catastrophes.

Florida-based companies and their reinsurers can survive devastating storms because they have an aggregate surplus of approximately $570 billion. This puts the Florida homeowners insurance market in its strongest position in history.

The growing membership of the Florida Property & Casualty Association demonstrates the health of the state’s insurance market. Consumers benefit from the association’s efforts to create a healthy, competitive Florida homeowners insurance market.

Through the advocacy efforts of the FPCA and its members, Florida’s regulatory environment has improved. State officials in Tallahassee and the industry have worked together to reduce the role of state government in providing coverage, to control claims fraud in areas such as sinkhole coverage, and to help insurers gain access to reinsurance. All have contributed to an environment that benefits insurers and consumers.