Florida-domiciled personal property specialist carriers booked close to $1 billion in underwriting gains in 2025, a turnaround from a $132 million underwriting loss recorded just two years earlier, AM Best said in a new report, pointing to the state's tort reforms and a quiet hurricane season as the main drivers.
The rating agency described the swing as evidence of market stabilization and more manageable operating conditions, while warning that underwriting discipline remains essential going forward.
For its report, AM Best identified 51 Florida-domiciled carriers that primarily underwrite personal property in the state.
The composite excludes insurers affiliated with large national carriers and Citizens Property Insurance Corporation but retains companies that have since become financially impaired or merged, to keep back-year data consistent.
"The improved Florida property insurance landscape reflects reduced litigation and claim solicitation, attracting new writers to the state while allowing existing writers to recover from losses in earlier years and take advantage of more refined pricing sophistication," said Lauren Magro, senior financial analyst at AM Best.
Magro added that while 2024 marked the segment's first underwriting profit in over a decade, 2025 extended the trend, helped by the absence of any named hurricane landfalls.
Despite the improved bottom line, Florida writers remain heavily dependent on the reinsurance market for capital protection, given the state's hurricane exposure. Modest reinsurance rate reductions came through at the 2025 midyear renewals, and AM Best expects more pronounced cutbacks at the 2026 midyear renewals.
Ceded reinsurance leverage as a percentage of policyholders' surplus continues to run far above the broader industry. The top 10 active Florida composite companies showed an average ceded reinsurance leverage of 562% in 2025, against a 55% US personal property composite average.
"With profitability stabilizing and primary carriers' balance sheets bolstered through sizable capital appreciation, along with stronger underwriting guidelines, some negotiating power shifting back toward primary carriers is likely," said Chris Draghi, director at AM Best.
Draghi noted, however, that a major hurricane striking a major Florida city could quickly reshape market dynamics.
Citizens remained the largest personal property writer in Florida overall, even as its direct premium written fell by more than 44% year on year on the back of depopulation efforts.
That depopulation drive picked up further in March 2026, when the Office of Insurance Regulation cleared takeouts of up to 10,000 policies by One Alliance North America, 50,000 by Southern Oak Insurance, 100,000 by Manatee Insurance Exchange and 30,000 by Slide Insurance — pulling Citizens' policy count down to around 322,500 as of March 20.
Defense and cost containment expenses — an indicator of litigation-related costs — dropped to roughly $131 million, a 68% reduction from 2024 and close to an 80% drop from the 2022 peak, which AM Best linked to the state's recent legislative reforms.
Carriers are also leaning more heavily on digital tools to sharpen pricing granularity and drive efficiencies, a shift AM Best said is contributing to a softer market after years of sizable rate increases.
