Florida-focused insurers slash 2023 losses, rest of field already in the black
Florida home-grown and locally-focused homeowner insurers trimmed their net underwriting loss by nearly 2/3 in 2023 to $397 million while the rest of the market pulled itself to an underwriting gain sufficient to offset that still-troubled cohort, a dataset compiled by Gallagher Re indicated.
For the market as a whole, it's a fabulous recovery from 2022 underwriting losses: the state-wide combined ratio fell 37.2 points to 96.7% as net underwriting results improved by an eye-opening $4.4 billion to a fractional state-wide net gain of $69 million.
The Florida specialists, excluding the array of firms put down or to run-off since early 2022, took 9.5 points off their combined ratio to fall within 1.3 points of the underwriting break-even point. The field is roughly evenly split between firms with a net underwriting gain and those still sporting losses. In 2022, net underwriting losses had outnumbered net underwriting gains 2.5 to 1.
Eye-popping prior-year triple-digit million underwriting losses from the likes of Privilege and American Strategic were slashed by some 60-75%. But problem cases remain: three firms with triple-digit million losses, Southern Owners, Universal, and Privilege, and another three in excess of $50 million.
Growth continued for the cohort, despite the aggregate margin difficulties. Mark gross written premium growth at 21.3% and direct written premium growth at 15%. That did not appear to have been handed over to reinsurers at any higher rate: net premium growth held the pace.
The state's insurer of last resort Citizens has been through a hairpin curve while bringing on a mass of new clients. 2023 brought a 142 point reduction in the firm's combined ratio to a profit-making 80.7%. Citizen’s swing from a $2.45 billion net underwriting loss to a $466 million gain accounted for 2/3 of the industry's overall underwriting profit improvement.
National players still braving the Florida market - Allstate (Castle Key), Nationwide, Travelers (First Floridian) and State Farm - pulled to a fractional aggregate underwriting gain of less than a million, highlighted by a big move to profit for State Farm. The group is moving harder and faster to achieve profits vs local rivals: their aggregate combined ratio fell 39.4 points to 97.4% without sacrificing much on growth: mark GPW up 19%, just below the 21% for the Florida specialists.
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