ORLANDO, Fla. — Insurance companies in Florida made money last year for the first time in seven years thanks to investment income and a mild hurricane season, according to an analysis conducted by S.&P Global market information.
A group of about 50 insurers reported $147.3 million in net revenue for 2023, compared with net losses of more than $1 billion in each of the previous two years, according to the analysis released last week.
The group shut down the state-backed Citizens Property Insurance Corp. from, the insurer of last resort for Florida homeowners who can’t get a policy anywhere else. Citizens is Florida’s largest home insurance provider, with 1.2 million policies written at the end of last year.
Although the group of insurers still had collective underwriting losses of $190.8 million, this was much smaller than in previous years, when it was almost $1.80 billion in 2022 and $1.52 billion in 2021.&P. Global Market Intelligence said.
Florida has struggled to maintain stability in the state’s insurance market since 1992, when Hurricane Andrew leveled Homestead, wiping out some insurance companies and scaring many remaining companies from writing or renewing policies in Florida. Risks to carriers have also increased as climate change increases the power of hurricanes and the intensity of rainstorms.
Last year, Farmers Insurance said it was ending new coverage of auto, home and umbrella policies in Florida, and AAA said it had decided not to renew “a very small percentage” of homeowners and auto insurance policies.
Since 2021, nine insurers in Florida have declared bankruptcy or merged with other companies. Average annual property insurance premiums rose 42% last year to $6,000 in Florida, compared to a national average of $1,700.
The Florida Legislature and Governor Ron DeSantis grappled with the issue in 2021 and 2022, including holding a special session, but most of the focus has been on protecting insurance companies from lawsuits and setting aside money for reinsurance to to help protect insurers.
Insurance companies are optimistic that the changes have reduced costs, especially the costs of litigating claims. In addition, Florida regulators this year approved six property and casualty insurers to begin writing home insurance policies, S&P. Global Market Intelligence said.