NEW YORK--(BUSINESS WIRE)--KBRA releases research discussing the financial position of Florida insurers following widespread forecasts for an active Atlantic storm season in 2024. In response to these forecasts, many Florida property insurers have prepared by purchasing increased reinsurance limits and coverage to protect their balance sheets. In addition, recent regulatory reforms, combined with insurers obtaining extensive rate increases, have attracted reinsurers to participate in the market. Across KBRA’s rated universe, primary insurance companies took different approaches in anticipation of higher losses. These included utilizing a combination of the traditional and capital markets, captives, and the Florida Hurricane Catastrophe Fund, as well as recalibrating quota share agreements and various expansions of their excess of loss reinsurance programs.
Key Takeaways
- Due to the positive results for Florida insurance companies in recent years, many companies were able to organically increase their surplus position despite declining total insured value and policy counts.
- Improved industry underwriting results in 2023 put downward pressure on reinsurance pricing, where rates largely remained flat and, in some instances, decreased year-over-year.
- Increased reinsurance capacity provided opportunities for insurance companies to purchase larger towers, provide better protection for multiple-event coverage, and adjust retentions.
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KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.
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