Florida insurers trim 9M losses as business flows to state insurer

Florida-focused insurers have reduced their 9M underwriting losses in 2022 by some 5.5% to just under $1.2 billion, in large part as business continues to be transferred to the state insurer of last resort, Citizens.

Citizens suffered a 21-times increase in 9M net underwriting losses to $2.26 billion, a dataset compiled by  Gallagher Re indicated.

Citizens thus went from having 1/12 of the underwriting losses shown by Florida-focused insurers in 9M 2021 to having twice the loss of the group in the first three quarters of 2022.

The market as a whole - the Florida-focused insurers, Citizens and key regional players - now has a $3.81 billion net underwriting loss after 9M, nearly three times the $1.31 billion from the prior year period.

That represent s a stunning turnaround from the situation at end-Q2, presumably the result of the late September landfall of Hurricane Ian. At end-Q2, Citizen's had been in the black with underwriting profits up ten times year on year.

The shift into Citizen in Florida is clearest in premiums, where Citizens is sweeping up business. Citizen's upped direct written premium 77.6% year on year, versus a mere 1.9% year on year gain for the shrinking crowd of insurers taking a majority of their premiums from the Florida personal property market. That gave the state insurer 2/3 of the market's overall growth.

Citizen's growth has been driven by a Florida market that runs insurers out of business. Southern Fidelity, Avatar P&C, St. Johns Insurance, Weston and FedNat have all gone to receivership in regulator moves. United P&C bid farewell to southern states on its own.

By end-September, the policy in force count at Citizen's was up 51.2% year on year to 1.07 million and has only risen since.

Major underwriting losses in excess of $100 million were visible at ASI Preferred, Castle Key, Privilege Underwriters Reciprocal Exchange, American Strategic Insurance Corp, United and Universal.

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