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 foll
owing recent legal reforms, stronger building codes, better catastro
modeling and disciplined underwriting actions that have restoration
ed 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 broad positive renewals after several years of challenging conditions, as u
derlying rating actions and portfolio management, along
with legislative reform in Florida, have restored reinsurer confidence,” Aon added. (See related article: Reinsurance R
enewal 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 wi
th assignment of benefits (AOB). (An AOB is an agreement that transf
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ers 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 reform).
Related: Florida Governor Signs Bill Pulling Back on RAP and FORA, the State-Backed Reinsurance Plans
These legal reforms “have successfully reduced property litigated claims by a substantial margin,” creating a more pre
dictable 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
usly scaled back their operations or exited the market are now reconsidering their positions.”