Rarely do two states on the same coastline, facing the same storms, behave like entirely different insurance markets. Yet in 2026, Florida and the Carolinas do.
"Any broker who treats them the same is likely mispricing both," said Marcela Connor, managing partner at Charlotte-based wholesale brokerage FTP Inc.
Connor recalls trying to place a coastal townhome association in Wilmington, North Carolina, in 2024. Built in 1995, with a total insured value of $17 million and fully exposed to the Atlantic, the account drew no interest from the private market. The only option was the North Carolina Joint Underwriting Association (NCJUA), the state's wind pool.
In 2026, she tried again.
This time, several carriers competed for the business, allowing her to place the policy at a premium 40% lower than the year before.
"That's a different job," she said. "And it's the first time in a couple of years that job has existed for this kind of property."
The US excess and surplus (E&S) market closed 2025 with $105.3 billion in domestic direct premiums, according to S&P Global Market Intelligence, marking its first year of single-digit growth since 2018. AM Best reports that the segment now accounts for more than a quarter of all US commercial insurance premiums.
But the headline numbers mask a growing divide in coastal property.
"Both are 2026 coastal property markets," Connor said. "They're just operating on completely different rules underneath."
Both regions maintain public backstops for risks the private market will not insure, but those backstops are producing very different outcomes. In the Carolinas, the wind pool retains the highest-risk properties while allowing private insurers to compete for the rest. In Florida, Citizens Property Insurance Corporation continues to shape market behavior through statutory rate constraints.
The divergence has less to do with weather than with how each state has structured its safety net.
The Wilmington account is one of several Connor has moved out of the wind pool this year. For years, the NCJUA became the default destination for coastal housing—not because the risks were uninsurable, but because the voluntary market had largely retreated. In 2026, that trend began to reverse.
Several factors are driving the shift. Global reinsurance capital reached a record $785 billion at the end of 2025, according to Aon. Guy Carpenter's property catastrophe index fell 12% in January. Meanwhile, NOAA recorded no US hurricane landfalls during the 2025 season, the first such year since 2015.
The impact is showing in the numbers. S&P Global reported that E&S commercial property premiums declined 2.8% in 2025, their first annual decrease since 2017.
Connor is careful not to overstate the improvement.
"The barrier islands are still a different universe," she said.
The market is reopening for the types of risks carriers want: mainland properties, newer construction, clean loss histories, and some distance between the building and the shoreline.
Florida remains a different story.
On Connor's desk sits a three-tower condominium association in Clearwater—a roughly $22 million risk currently insured through Citizens.
Built in 1976 on Florida's Gulf Coast, the property's hurricane premium equates to approximately 17 cents per $100 of insured value. Its wind-mitigation features are either undocumented or absent.
"What private carrier in their right mind is going to compete with 17 cents on wind for a 1976 Clearwater condo with no documented mitigation?" Connor said. "Nobody. The math doesn't work."
Connor believes she could secure private-market capacity for the account.
"But I can't build a tower at a number the board would rationally pay to leave Citizens," she said. "So they stay."
In the Southeast, pricing often determines everything. Citizens remains Florida's largest property insurer and operates under statutory rate constraints, while North Carolina's wind pool is structured to function as a true insurer of last resort.
Connor sees today's softening market, but she does not mistake it for a recovery.
The benefits have largely flowed to the risks carriers already preferred: larger programs, newer buildings, and diversified schedules. Wind deductibles on highly exposed coastal properties have changed little.
"Carriers aren't passing through relief they didn't get themselves," she said.
A quiet 2025 hurricane season contributed as much to 2026 pricing relief as the influx of capital. An active 2026 season could quickly erase those gains.
While S&P Global reported 7.8% E&S premium growth in 2025, it also marked the end of a six-year streak of double-digit expansion.
Casualty tells a different story.
No quiet hurricane season can offset rising jury awards, nuclear verdicts, or court environments that consistently favor plaintiffs. According to Connor, liquor liability risks in South Carolina remain among the most difficult placements in the country.
"The agent who treats this year's savings as the new normal," she said, "is setting up a very uncomfortable client conversation 18 months from now."
For brokers, Connor believes three priorities stand out.
First, get valuations right.
Unlike many admitted homeowners policies, E&S coastal policies often do not include automatic replacement-cost inflation protection. Construction costs have risen by 30% to 40% over the past five years, leaving many property schedules materially underinsured.
The consequences typically emerge only after a loss, when the client discovers the policy does not provide the protection they expected.
"That's the wrong moment for that conversation," Connor said.
Second, choose wholesalers based on market access rather than turnaround times.
Lloyd's syndicates have distinct appetites, and coverage provisions that retail agents may assume are standard are often negotiable in the E&S market. Wholesalers with established market relationships can often secure concessions unavailable to those approaching carriers only occasionally.
Third—and perhaps most importantly—be honest with clients about what 2026 represents.
Admitted carriers are returning to parts of the Carolinas coastal market. Some policyholders will secure lower premiums and broader coverage. Those improvements are real.
But Connor cautions that brokers should view them as part of an insurance cycle rather than evidence of a lasting recovery.
The current relief, she argues, is unlikely to survive the next major wind season.
"The agents who pull fresh valuations, pick their wholesalers for the markets they actually work with, and level with their clients about the cycle," Connor said, "will look like heroes. The ones who don't will be putting out fires in 2027."
