Florida’s personal property insurance posts first underwriting profit since 2016 – AM Best

Florida’s personal property insurance market is undergoing a transition, with signs of stabilization after a period of volatility and sharp premium increases.

According to a report by AM Best, the state’s property/casualty sector is seeing increased competition, new market participants, and moderating premiums. In a notable development, the segment posted an underwriting profit in 2024, ending eight consecutive years of losses.

Florida personal property insurers recorded a collective underwriting profit of $206.7 million in 2024, a shift from a $174.4 million loss the previous year, along with a pre-tax profit of $492.3 million.

The improvement follows a lengthy period marked by hardened market conditions, including significant premium hikes and declining capacity. Legislative reforms introduced in 2022 played a key role by addressing the legal environment and reducing litigation, which had negatively impacted insurers’ financial performance.

Senate Bill 2A, enacted in December 2022, removed the statutory attorney’s fee-shifting provision for residential and commercial property lawsuits. This adjustment was aimed at reducing the volume of insurance litigation that had been a major cost driver for Florida insurers.

AM Best noted that the reforms not only benefited existing insurers but also encouraged new companies to enter the market, expanding capacity and altering the competitive landscape.

Challenges in Florida’s insurance market

The market’s challenges have led to several insurer insolvencies over the past few years. In 2021, a major homeowners’ insurer became insolvent, followed by seven more in 2022. Only one insolvency occurred in early 2023, signaling a potential shift as rate increases took hold and premiums rose.

urance Company (2022), Weston Property & Casualty Insurance Company (2022), Lighthouse Property Insurance Company (2022), Avatar Property & Casualty Insurance Company (2022), St. Johns Insurance Company (2022), Maison Insurance Company by way of FedNat (2022), Gulfstream Property and Casualty Insurance Company (2021), and Florida Specialty Insurance Company (2019).

In addition to the reforms, Florida has seen a notable decline in defense and cost-containment expenses (DCCE). AM Best data show that Florida’s DCCE ratio fell to 3.1 in 2023 from 8.4 in 2022. This decrease reflects a reduction in litigation-related costs, historically a significant burden on insurers’ operating performance.

Lower DCCE ratios suggest that insurers are experiencing less frequent and less expensive claims disputes, contributing to the improved financial results observed in the market.

Efforts to depopulate the Citizens program

The contraction in market participants, along with displaced policyholders, led to significant growth for Citizens Property Insurance Corporation, the state’s insurer of last resort. AM Best reported that Citizens’ policy count grew by more than 150% between January 2021 and September 2023, surpassing 1.4 million policies.

The growth increases the potential financial risk in the event of a major catastrophe, which could deplete Citizens’ surplus and result in a statewide surcharge on all insurance consumers.

To address this risk, Citizens operates a depopulation program to transfer policies to private insurers and manages a reinsurance program to protect its surplus. In 2024, Citizens secured a $3.564 billion reinsurance tower, comprising $1.6 billion in catastrophe bonds and nearly $1.3 billion from insurance-linked securities and collateralized markets.

For 2025, the corporation plans to obtain $4.54 billion in private reinsurance, including $2.94 billion in new private risk transfer, alongside the existing $1.6 billion in catastrophe bonds from previous years. Citizens removed approximately 275,000 personal property policies in 2023, reducing exposure by around $113 billion.

The trend continued in 2024, with over 475,000 policies removed, cutting exposure by roughly $200 billion. As of April 2025, depopulation efforts have removed more than 152,000 policies, lowering exposure by over $60 billion.

As of March 31, Citizens reported approximately 841,470 policies in force, a 40% reduction from the peak in September 2023.

Citizens’ operating performance over the past five years has been volatile, influenced by legislative shifts, catastrophic events, and equity market fluctuations. The company’s largest net loss in the period occurred in 2022, driven by Hurricane Ian and end-of-year market volatility, leading to a 34.4% decrease in surplus.

In 2023, Citizens posted positive net income, supported by a lighter hurricane season and the early impacts of tort reform. However, 2024 saw a return to losses, with three hurricanes affecting Florida, increasing claims and loss adjustment expenses, and continued costs from Hurricane Ian.

Josie Novak, senior financial analyst at AM Best, said that Florida’s legislative reforms helped longstanding insurers and attracted new market entrants, expanding capacity.

“Additionally, the retreat of certain carriers – whether through reduced market participation or the suspension of new business – has created space for new companies to establish a foothold, further reshaping the competitive landscape,” Novak said.

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