Florida insurers rebound but face storm risks
Florida’s property insurance sector has achieved stability after enduring prolonged instability, but its future hinges on reinsurance pricing and the state’s ability to withstand hurricanes. A recent analysis by Morningstar DBRS examines how the market, long considered one of the most disaster-vulnerable in the U.S., has rebounded from a stretch marked by insurer collapses, skyrocketing reinsurance expenses, and a sharp rise in policies through the state-run Citizens Property Insurance Corporation between 2020 and 2023.
Private insurers have since recaptured lost market share, profitability has rebounded to levels not seen in a decade, and Citizens’ policy rolls have shrunk as homeowners transitioned back to private coverage. Premium increases, averaging roughly 50% over the period from 2020 to 2025, were necessary to cover escalating loss costs, and the adjustments have delivered results. In 2025 alone, insurers reported a net income of $2.1 billion, a substantial jump from the $955 million recorded the previous year. This performance was driven by an 83% combined ratio, which translated into $1.86 billion in underwriting profits.
The turnaround reflects improved reinsurance terms and legislative reforms, though affordability for policyholders remains a persistent challenge. While pricing has stabilized and insurer capacity has expanded, costs still exceed historical norms. Given Florida’s significant exposure to hurricane risk, continued access to affordable and readily available reinsurance will remain critical to the market’s long-term stability and financial strength.
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Morningstar DBRS stresses that the resilience of private-market insurers in the face of a direct hurricane strike will be the defining factor in the market’s long-term health. Legislative changes and stricter underwriting standards have strengthened conditions, but the next significant storm will serve as the ultimate test. For now, the market’s stability depends on reinsurance remaining both accessible and reasonably priced, despite the ever-present threat of hurricane-related losses.
Industry observers point to Everglades Insurance Group as a case study in recovery. After filing for receivership in 2022 due to unsustainable losses, the company emerged in 2024 with a restructured business model focused on high-risk properties.
