Florida property insurance regulators have touted recent improvements they say have made the beleaguered market more stable, but questions linger about that assessment.
The Florida Office of Insurance Regulation said this week that Mangrove Property Insurance Co. of St. Petersburg, Florida, is the latest insurer approved to offer residential property coverage in the Sunshine State and that it will do so across all 67 counties.
Mangrove becomes the 11th property insurer to enter Florida since legislative reforms were enacted in 2022 and 2023, according to FOIR.
Florida Insurance Commissioner Mike Yaworsky said his office is working to recruit even more insurers.
"We will continue to emphasize the encouraging signs of the resilience and growth of our market to attract more business to our state," he said in a statement.
Martin Weiss, founder of Weiss Ratings, a Palm Beach Gardens, Florida-based independent rating agency for insurance companies, said his firm doesn't have sufficient data to rate Mangrove. But Weiss insists that the batch of new insurers offering coverage in Florida does not necessarily make the market as sound as the state contends.
"The history would indicate the answer is a flat no," he said in an interview.
Reforms needed
A spike in insurance claim fraud and deep underwriting losses from such storms as the Category 4 Hurricane Ian in 2022 sent Florida's property insurance market into a tailspin. Before state lawmakers intervened with legislative reforms in that same year, nearly every insurer offering residential property coverage in Florida raised rates, reduced their footprints or stopped writing new business, according to FOIR.
To address the insurance crisis, a special legislative session resulted in reforms that included making it illegal for contractors to file insurance claims on behalf of homeowners, also known as assignment of benefits, and eliminating one-way attorney fees that forced insurance companies to cover the legal costs of plaintiffs suing them.
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Among the top 10 national carriers in Florida, 60% have expanded their books of business in the state and 40% filed for rate decreases, according to FOIR. Since January 2024, 17 companies have filed for rate decreases and 34 have requested no changes in rates.
There are more than 7.55 million residential insurance policies across Florida, according to FOIR.
Mangrove joins the following new companies that the state has approved to enter the market since the legislative reforms: ASI Select Insurance Corp.; Trident Reciprocal Exchange; Ovation Home Insurance Exchange; Manatee Insurance Exchange; Condo Owners Reciprocal Exchange; Orange Insurance Exchange; Orion180 Select Insurance Co.; Orion180 Insurance Co.; Mainsail Insurance Co.; and Tailrow Insurance Exchange.
The Insurance Information Institute, a research and education group, agrees with FOIR that Florida's property insurance landscape has improved dramatically over the past year. Property claim lawsuit filings have declined roughly 35% year-over-year, significantly reducing expenses for insurers, noted Mark Friedlander, the institute's director of corporate communications.
1% average increase
What's more, the average weighted statewide rate increase last year was 1%, Friedlander said in an email. He cited FOIR and an independent report from S&P Global Market Intelligence as the source for this information.
"This was the lowest average weighted rate increase in the U.S. last year and validates that the Florida market is stabilizing," he said.
Friedlander said consumers benefit because they now have more options to shop for coverage.
But Weiss, the rating agency founder, said the state uses a less-experienced rating agency that judiciously gives A ratings to many companies approved in Florida. He is calling for a more objective metric to evaluate the financial health of property insurers.
The Florida Office of Insurance Regulation did not immediately respond to a request to address these concerns.
Many of the approved insurance companies are short on reserves because they’ve diverted funds to shareholders or to parent companies outside the state, Weiss has said. He explained that over the past two decades, more property insurers have filed for bankruptcy in Florida than in all other states combined.
In addition, Weiss is critical of insurers denying legitimate storm claims or opting not to make payment for what he says are invalid reasons, forcing homeowners to sue. In 2023, the most recent year for which data is available, more than 20% of the Florida claims closed without payment and led to lawsuits, according to Weiss.
"That is huge," Weiss said.
Meanwhile, the state-backed Citizens Property Insurance Corp., the insurer of last resort, has asked FOIR for permission to raise rates by an average of 13.5%. The request is meant to make Citizens' rates actuarially sound to cover the costs of potential claims, according to the company. FOIR has yet to rule on the request.
In late 2024, for the first time in more than two years, Citizens’ policy count fell below 1 million. FOIR said it approved 18 companies to assume more than 1.2 million policies from Citizens, reducing Citizens' exposure by more than $170 billion.