Florida reforms show signs of working but reinsurers remain coy on biggest cat market

Extensive and much-needed regulatory reforms in Florida appear to have worked with new insurers launching—but reinsurers remain wary.

Following extensive regulatory reforms, the property market in Florida is on track to return to health, with claims and litigation falling and new insurers launching. But reinsurers remain wary of a market that is the biggest catastrophe insurance market in the world—one which has caused significant pain for the industry in the past.

“Florida is something of a dilemma for reinsurers,” one source told APCIA Today. “On the one hand it is very appealing and if you are serious about cat you cannot ignore Florida. On the other hand, many have painful memories. Will these reforms really work? Maybe it is too soon to tell.”

That point was illustrated by the recent visit that Mike Yaworsky, Commissioner of the Florida Office of Insurance Regulation, made to Bermuda to woo reinsurers last month.

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Current market is ‘the new normal’

Rates set in 1/1 renewals are here to stay, says Everest’s Sharry Tibbitt.

Casualty reserve covers in demand

Concerns over litigation are driving increased interest: Gallagher Re.

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Cedants eye scope to negotiate as $50bn in capacity returns

Prices and attachment points are likely to remain stable in 2024, but cedants are likely to look for relaxation on terms and conditions as more capacity comes into the market, says Guy Carpenter’s Randy Fuller.

This year’s 1/1 renewal season is likely to be more stable than 2023’s “tremendous correction” in the reinsurance market, according to Guy Carpenter.

Randy Fuller, the head of the North America Property Centre of Excellence and the Florida segment leader, told AIPCA Today that he expected this year’s season to be “set up for stability” as capacity returns to the market.

But, he said, he expects some adjustments on terms and conditions, in part because as much as $50 billion in capacity is likely to have returned to the market by the end of the year, giving cedants more scope to negotiate changes.