Florida faces more reinsurance problems
Share this @internewscast.com

TALLAHASSEE, Fla. – As Florida lawmakers try to stabilize the troubled property-insurance system next month, they could face worsening problems with reinsurance, a critical part of the system.

Fitch Ratings released an analysis Wednesday that said overall reinsurance prices are expected to increase by more than 10 percent in 2023, pointing to losses from disasters such as Hurricane Ian and “increasing frequency and severity of natural catastrophe claims.”

“Price rises will be most pronounced in the regions worst affected by natural catastrophe events in 2022, including Australia, Florida and France,” the ratings agency said. “Hurricane Ian is likely to have caused between ($35 billion and $55 billion) of insured claims, making it one of the costliest natural catastrophe events ever.”

In the analysis posted online, Fitch also said it expects tighter restrictions when reinsurance policies are renewed in 2023, while raising the possibility that Florida property insurers will not be able to buy all of the reinsurance they need.

“Nevertheless, we believe demand for property catastrophe reinsurance during the 2023 renewals season will be broadly met, except for Florida,” the analysis said.

Reinsurance, which is sold in a global market, is essentially backup coverage for insurers. It plays a crucial role in Florida, as evidenced by the projected tens of billions of dollars in damage from the Category 4 Hurricane Ian, which made landfall Sept. 28 in Southwest Florida before crossing the state.

When property insurers’ losses reach certain thresholds, reinsurance coverage is triggered to help pay claims. Costs of reinsurance are baked into policyholders’ rates.

Florida property insurers rely on a combination of reinsurance bought in the private market and from the state-run Florida Hurricane Catastrophe Fund. As an example of the importance of reinsurance, the Florida Hurricane Catastrophe Fund estimated last month it would have $10 billion in losses from Ian.

Reinsurance costs and availability were a problem in the Florida market before Ian. During a May special legislative session, lawmakers agreed to spend $2 billion in tax dollars to temporarily provide additional reinsurance coverage to insurers.

Gov. Ron DeSantis called the May special session amid widespread problems in the insurance industry that have included homeowners losing policies and seeing massive rate hikes. Meanwhile, some property insurers have gone insolvent, and policies have flooded into the state-backed Citizens Property Insurance Corp., which was created as an insurer of last resort.

Problems, however, have persisted, and lawmakers will hold another special session the week of Dec. 12 that is expected to include making additional changes to try to bolster insurers.

House Speaker Paul Renner, R-Palm Coast, said Tuesday that lawmakers will look at a “kitchen sink of options” during the special session to try to stabilize the market and expand private coverage. He indicated those options could involve spending additional money to help with reinsurance.

“It would be temporary, and it has to be contingent on getting major reforms so we actually fix the situation,” Renner told reporters. “I do not want to be in a situation where we make any kind of new long-term taxpayer commitment to underwrite insurance. That is not the goal. The goal is to have a healthy private market, to then begin depopulating (removing policies from) Citizens so that we get back to where we were not so many years ago, which is a healthy, vibrant market where people can not have a cardiac arrest when they get their renewal bills.”

Share this @internewscast.com
You May Also Like

Strictly Come Dancing Luba and Katya Jones kiss after same-sex dance has viewers issue plea

Luba Mushtuk kissed Katya Jones at the end of a beautiful dance

Australia reduces national terrorism threat to ‘possible’

CANBERRA – Australia’s terrorism threat level has been downgraded from “probable” to…

St. Pete Police Officer On “No-Duty” Status After Officer-Involved Shooting

The firearm located on the scene. Source: PCSO PINELLAS COUNTY, Fla. –…

Bucs’ Tristan Wirfs carted off after ‘gruesome’ injury against Browns

TAMPA, Fla. (WFLA) – Tampa Bay Buccaneers offensive tackle Tristan Wirfs was…

Congressman details GOP House investigations to come

() — Congressman Jim Comer (R-Ky.) said Republicans are preparing for forty…

Feds Should Defund Law Enforcement Refusing to Enforce Gun Laws

Senator Chris Murphy (D-CT) said Sunday on CNN’s “State of the Union” that…

Pakistan launches new anti-polio drive amid spike in cases

ISLAMABAD – Pakistani authorities launched a new nationwide anti-polio drive on Monday…

One person shot, killed outside West Side Walgreen, San Antonio police says

SAN ANTONIO – One person was shot and killed in the parking…

I'm A Celebrity viewers spot 'problem' with final result show that ITV still hasn't fixed as Jill Scott wins

Owen Warner came second but he didn’t get the chance to walk…

Pockets of shelling across Ukraine as wintry warfare looms

KHERSON – Shelling by Russian forces struck several areas in eastern and…

Colorado governor says state will consider expanding red flag laws after Club Q shooting

Colorado governor says state will consider expanding red flag laws after Club…

Jon Batiste will perform at dinner for Macron, Biden

The black-tie dinner for Macron will be part of what is shaping…