Reinsurers have gained confidence and returned to the Florida market as a result of recent legislative reforms that have transformed the state’s risk landscape, according to brokers Aon and Gallagher Re in their mid-year renewal reports.
“Florida entered the mid-year renewals on a much sounder footing following recent legal reforms, stronger building codes, better catastrophe modeling and disciplined underwriting actions that have restored confidence in the local insurance market,” said Aon in its report titled “Reinsurance Market Dynamics – Midyear 2025 Renewal.”
“Florida and non-loss affected U.S. regional insurers also experienced broadly positive renewals after several years of challenging conditions, as underlying rating actions and portfolio management, along with legislative reform in Florida, have restored reinsurer confidence,” Aon added. (See related article: Reinsurance Renewal Prices Moderate as Capacity Exceeds Cedent Demand: Brokers).
Over the past few years, many reinsurers pulled back from the Florida market as a result of inadequate prices and inflated claims related to abuses connected with assignment of benefits (AOB). (An AOB is an agreement that transfers the insurance claims benefits of a policy to a third party, which often raised claims and costs. Such agreements have been curtailed by the Florida legal reforms).
These legal reforms “have successfully reduced property litigated claims by a substantial margin,” creating a more predictable and stable environment, which has increased reinsurers’ confidence in the Florida market, said Gallagher Re in its report titled “1st View: Challenging the Status Quo.”
“This newfound confidence has led reinsurers to reassess their view of risk and adjust their strategies,” Gallagher Re said, noting that many reinsurers that “previously scaled back their operations or exited the market are now reconsidering their positions.”
