Florida domestic residential property insurers saw a positive financial turnaround in 2023 after seven years of struggling. According to an analysis by S&P Global Market Intelligence, the group of around 50 insurers reported a net income of $147.3 million for the year, marking a significant improvement from previous years of losses exceeding $1 billion.
One of the key factors contributing to this improvement was a notable increase in investment income and better underwriting results. Additionally, the industry benefited from a mild hurricane season and saw a rise in investment income during the year.
Despite still recording an underwriting loss, the industry's losses in 2023 were considerably narrower compared to previous years. There are also promising signs that recent legislative reforms will have a positive impact on the troubled market, with a decrease in new non-catastrophe litigated cases being filed.
Stephen Donaghy, CEO of Universal Insurance Holdings Inc., expressed optimism about the long-term benefits of tort reform measures implemented in March 2023. He mentioned during an earnings call that future rate reductions in Florida could be possible as a result of these reforms.
Citizens Property Insurance Corp., the state-backed insurer of last resort, reported significant premium growth in 2023. The insurer's total direct premiums written reached $5.07 billion, a 59% increase from the previous year. Citizens also posted a net income of $746.5 million for the year, a stark contrast to the loss reported in 2022.
In a move to increase competition in the market, Florida's insurance regulator approved six new property and casualty insurers to start writing residential property insurance business in 2024. This includes entities like Condo Owners Reciprocal Exchange, Tailrow Insurance Co., Orange Insurance Exchange, Mainsail Insurance Co., Orion180 Insurance Co., and Orion180 Select Insurance Co.
The positive financial results seen in 2023 reflect a turning point for Florida's property insurance market, with improvements in income and promising signs for the industry's future.