A new insurer writing new homeowner policies in the state – and a slowing rate of premium increases – indicate the state’s homeowner insurance market is “strengthening,’ state officials say.
A new Florida insurer writing homeowner policies — in addition to other signs such as the slowing rate of premium increases — indicate the state’s insurance market is “strengthening,” according to the industry’s top state regulator.
But that cheery assessment has been met with some skepticism.
Nonetheless, Trident Reciprocal Exchange has been approved to write homeowner policies in Florida, the Office of Insurance Regulation (OIR) announced last week. The Lake Mary-based company is the ninth new insurance company this year to join the total marketplace of 167 companies permitted by state officials to do business in Florida.
Also, Progressive Insurance executives met with OIR officials to reinforce their commitment to staying in Florida as premium increases have slowed and more and more property owners are leaving the state-backed, nonprofit insurer of last resort for private insurance providers, according to the same news release.
Florida private insurance industry has been on life support
Only last year, the industry was deemed to be on life support as six Florida insurance companies were declared insolvent in 2022 and 2023.
The OIR gives companies permission to enter the market after reviewing each one according to certain requirements. Rating agencies evaluate a number of factors in companies’ ongoing operations, such as cash reserves, liabilities versus assets and track record.
Mortgage companies typically require insurers to meet a certain grade from one of two major ratings agencies before they’ll sign off on a mortgage. The current crisis started to grab headlines when a major ratings agency, Demotech, threatened to downgrade the financial stability rating of more than two dozen Florida companies’ ratings, in spite of the high premium rates Florida policyholders pay.
Two special legislative sessions were called in 2022 to fix the market’s problems.
A spate of major hurricanes battering the state since 2015, the high rate of lawsuits against insurers and spooked financial markets unwilling to shoulder the risks have been blamed for the situation that spurred further action by the Florida Legislature in 2023 and 2024.
Now, Trident’s entry plus the slowing rate of premium increases and fewer people relying on the state’s insurer of last resort “are a further indication of the continued strengthening of Florida property insurance market,” according to a prepared statement from State Insurance Commissioner Michael Yaworsky, “OIR will continue to work with Florida-based and national carriers, like Progressive to recruit and retain business so that all Floridians may benefit from a strong market,” he added.
Still, the insurance premiums that Floridians are paying have made them No. 1 in the United States, and not in way they would want, however.
Floridians are paying an average of $11,759 for their insurance premiums this year, almost five times the national average of $2,522, according to estimates from Insurify, a national insurance comparison shopping website. Another consumer services company, Bankrate, puts the average Florida insurance premium at $5,533 for a $300,000 home compared with the $2,230 national average for a home valued at the same level.
State insurance regulators note that the average request for premium increases over the past 30 days is for a 0.5% increase, compared with last year when the same number was at a 7.6 % average increase.
Those continuing high rates have state Rep. Anna Eskamani, D-Orlando, who serves on the Legislature’s Select Committee on Hurricane Resiliency & Recovery, skeptical that some sort of sea change in Floridians’ insurance struggle is about to hit.
The slowing rate of average premium increase came at a cost — it follows legislative legal reforms that make it more difficult to sue insurers, Eskamani explained.
“Floridians are paying higher prices for insurance that is meaningfully worse … It leaves them with almost no recourse to fight against a company that may unfairly delay or deny a claim,” she wrote in a text.
Skepticism that insurance market is really improving for Florida consumers
Trident’s entrance into the market is part of a continuing pattern that’s not going to help the insurance market’s health, Eskamani also noted. The LinkedIn profile of Trident’s CEO, Maria Moller, says that she helped start Coral Insurance Co. That company went into state rehabilitation the same month her profile said she left in 2009. It was liquidated a year later, in 2010.
“We keep claiming that we’re attracting new insurers, but these ‘new’ insurers are being set up by the same old people who have been profiting off our system for years,” Eskamani added.
Attempts to reach someone at Trident were not successful Monday.
Mark Weiss, founder of Weiss Ratings, based in Palm Beach Gardens, doesn’t see the new entrant as good news either because, by definition, they are weak and inexperienced.
“Among those companies that have entered the state under similar circumstances, approximately half are no longer in business,” Weiss said in an email.
Three of the nine new insurers that have signed on since April do not have their own rating from the financial ratings firm Demotech. Federally backed mortgage companies once required an “A” financial stability rating from Demotech for Florida properties it approves, but an acceptable rating from Kroll Bond Rating Agency has since been added.
Mark Friedlander, spokesman for the Malvern, Pennsylvania-based and industry-funded Insurance Information Institute, said that policyholders should have no fear about accepting insurance from these new market participants.
“Agents will not typically represent companies that don’t carry a strong financial rating from an independent third-party bureau,” he said.
The OIR also noted that commercial lines have reduced the liability of Citizens Property Insurance Corp. by nearly $65 billion to date. That could be good news for all insured Florida property owners. Should the payouts to Citizens’ policyholders exceed the insurer of last resort’s means, all insurance policyholders would face an assessment on their premiums.
Anne Geggis is the insurance reporter at The Palm Beach Post, part of the USA TODAY Florida Network. You can reach her at ageggis@gannett.com. Help support our journalism. Subscribe today.