Florida’s insurance market has managed to see an upturn after years of struggling with profitability.
This is according to Mark Friedlander of the Insurance Information Institute (Triple-I), who pointed to figures from the state’s insurance regulator.
“According to data from the Florida Department of Insurance Regulation, insurers are showing much more positive results this year than they have in the past,” Friedlander said in an interview with local news network WPTV.
Friedlander, who serves as Triple-I’s corporate communications director, posited that the improved financial performance can be attributed to a relatively quiet hurricane season.
So far, Hurricane Idalia has been the only significant hurricane to hit Florida this season and its impact has paled in comparison to the devastation wrought by Hurricane Ian the previous year.
The inactive hurricane season also comes as good news for reinsurance activity in the state.
Earlier this year, Berkshire Hathaway took on about $15 billion of exposure in Florida. And with forecasts indicating no major storm formations in the Atlantic Ocean, the company stands to see huge gains, a report by Barron’s noted.
Despite his optimism, Friedlander warned that the industry’s newfound profitability won’t directly translate to relief for policyholders.
According to Friedlander, insurers in Florida have to factor in the expected risk while pricing their policies, and this calculation involves data for more than just one hurricane season.
Bloomberg columnist Jonathan Levin said the same thing in his July analysis of the state’s insurance market.
“Berkshire’s big bet on Florida is an early sign that at least the market hasn’t abandoned the state. In fact, the industry will gladly stick around for the long haul, but only at the “right price” — and that in and of itself will be a hard pill to swallow for the average homeowner,” said Levin.
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