Florida Q2 insurance losses ease as business flows to state insurer

Florida-focused insurers reduced their second quarter underwriting loss by over half to $307 million, chiefly as the state insurer of last resort Citizens swept up business.

Citizens increased its Q2 underwriting profits ten times over to $216 million to account for nearly 60% of the year-on-year underwriting improvement for insurers taking a majority of their premiums from the Florida personal property market, a dataset compiled by  Gallagher Re indicated.

Citizens’ gain in underwriting profits proved 34% larger than what the entire rest of the field could do to trim their still sizeable losses. All others combined pared their aggregate underwriting loss by $147 million or 22% to $524 million.

Of 52 tracked firms, only five had underwriting profits in Q2 both last year and this year. Thirty were loss makers across both periods. Of 48 tracked net loss ratios for Q2 2022, 22 are over 80%, including seven over 100%.

Citizens swept up business over the year. The Florida state insurer of last resort accounted for more than half of the aggregate annual increase in direct written premiums on a $654 million or 78% year on year gain to nearly $1.5 billion. The rest of the field combined for a 6.5% premium increase.

Half a billion in prior-year direct premiums had been accounted to five firms since placed in receivership for liquidation.

Of the 54 firms left for tracking on the metric, aside from Citizens, thirteen had suffered a decline in direct premium, including nine with double-digit percentage declines.

Beyond Citizens, major gainers included: Privilege Underwriters Reciprocal Exchange with the largest single nominal gain of $122.5 million. The group paid for it with a 70% increase in underwriting losses.

First Protective and Edison Insurance both managed ranking nominal gains of $98 and $85 million, respectively and still ended with underwriting gains. Florida Farm Bureau Casualty and Kin Interinsurance Network posted the only triple digit gains amongst major players.

Citizens may be sweeping up some seemingly good business: the firm's net loss and loss adjustment ratio at 52.6% is down 18 percentage points on the prior year period and proved over 20 points better than the broader industry aggregate. Citizen's is likewise operating with a net expense ratio 12.4 percentage points below the industry aggregate.

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