From the Editor’s Desk
Florida in the Eye of the Insurance Storm
The June issue includes a feature about a claims backlog in Florida, an interview with the winners of AM Best’s Student Challenge and a report on insurance asset management and developments in the bond market.
- Patricia Vowinkel
- June 2022
It's been four years since a major hurricane made landfall in Florida, but that hasn't prevented the state from moving into the eye of an insurance storm.
While it's been relatively quiet in Florida since Hurricane Michael slammed into the Florida Panhandle and caused an estimated $14.2 billion in insured losses, the Florida market has deteriorated.
Several Florida-domiciled personal property companies have been ordered into receivership in the past few years. These include Florida Specialty Insurance Co., Gulfstream Property and Casualty Insurance Co., St. John's Insurance Co. and Avatar Property & Casualty Insurance Co., according to the Best's Commentary: Troubled Florida Property Market Participants Under Immense Pressure.
FedNat Holding Co. has said it has submitted an action plan to the Florida Office of Insurance Regulation as it seeks to significantly downsize. It has said in its 10-K that the company believes there is “substantial doubt” about its ability to remain a going concern, according to the commentary.
The Florida Legislature convened a special session in late May to address the state's insurance problems.
“The deterioration in performance is a by-product of the greater frequency of secondary perils (severe thunderstorms, wind, hail), higher reinsurance costs, escalating litigation costs, and building codes/laws that have been flouted by parties looking to profit,” according to the report.
In “Stormy Weather: In Florida, Property Claims Face Litigation Backlog,” Best's Review examines a backlog of claims, mainly in Florida, and the impact that is having on reinsurance and the insurance-linked securities market. In 2013, for instance, Florida insurers faced 27,000 litigated claims, a number that has more than tripled since then, according to Barry Gilway, president of Florida Citizens Property Insurance Corp.
The June issue of Best's Review also includes coverage of insurance asset management.
In “US Fed Rate Hikes, Ukraine Invasion and Lingering COVID-19 Inject Volatility Into Bonds,” Best's Review speaks to experts about the outlook for the bond market.
The June issue of Best's Review also includes interviews with the winners of AM Best's second annual Student Challenge competition. In “AM Best's Student Challenge Winners Offer Battle Plan for Infectious Disease Remediation,” Best's Review speaks with Julia Berdzik and Elizabeth Colpe of Saint Joseph's University about their winning submission. Finalists also included students from Florida State University and Illinois State University.
In “Insurance Industry Events Return to In-Person Venues,” Best's Review provides a listing of events scheduled for the second half of 2022.
The June issue also includes a ranking of the top European insurers based on 2020 gross premiums written. The ranking is paired with an excerpt of a Best's Market Segment Report on nonlife insurance companies in France.
Special Note: The June issue of Best's Review has been reduced in size due to a global paper shortage. Visit www.bestreview.com for additional articles and expanded coverage.
Also, the AM Best Business Trilogy, which details the history of AM Best, the history of credit rating agencies and the life of Alfred M. Best, is now available in an audiobook format at audible.com.