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Fla. residential property insurers post back-to-back $1B+ losses

Costs associated with litigation and Hurricane Ian pushed Florida's domestic residential property insurers deeper into the red in 2022.

Those companies, including national carriers but excluding state-owned Citizens Property Insurance Corp., collectively lost $1.50 billion in 2022 compared to the $1.15 billion they lost in the previous year, based on an analysis of available regulatory statements. The yearly net income figures include eight insurers that became insolvent during the previous two years.

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Since the end of 2022, United Property & Casualty Insurance Co., the largest individual subsidiary of United Insurance Holdings Corp., has joined the list of Florida-based insurers that have been placed into receivership. To return to profitability, United Insurance's remaining units are leaving the personal lines market in Florida and will shift focus to commercial property coverage.

Carriers that remain in the Sunshine State's residential market are banking on recently enacted tort reforms easing the substantial legal costs they have faced over the past several years. During a late-March board meeting, Citizens' new president and CEO, Tim Cerio, described several of the reforms as "game changers" and said the elimination of one-way attorney fees and assignment of benefits will aid the troubled market over time.

SNL Image Read about the impact of tort reform within Florida's private auto market.
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Citizens' premiums soar more than 75% in 1 year

As the private insurance market in Florida has shrunk, its state-run insurer of last resort has seen in-force policy counts and direct premiums surge. Citizens' total direct premiums written grew to $3.19 billion in 2022, an increase of 75.8% from the prior year. The insurer added nearly 400,000 policyholders in 2022 alone, ending the year with a count of about 1.15 million. The influx has yet to abate in 2023, as the insurer's in-force policy count swelled to about 1.24 million as of March 31.

Universal Property & Casualty Insurance Co. remains the largest private residential property insurer in the state, bringing in $1.51 billion in direct premiums written within its homeowners, allied lines and fire lines of business. About 94% of its property premiums were within the homeowners business line. The insurer's total net losses were $141.2 million in 2022, compared to the $106.2 million it lost in 2021.

State Farm Florida Insurance Co. reported a net loss of $210.5 million for full year 2022, the largest among the 20 biggest property insurers in the state. The carrier recorded total premiums of $1.11 billion for the year, with $963.4 million written within the property lines of business.

A new entrant into the Florida residential market, Slide Insurance Co., recorded $467.1 million in property premiums in 2022. The insurer moved into the market by picking up policies from insolvent St. Johns Insurance Co. Inc. and securing renewal rights from UPC Insurance.

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