ALIRT Insurance Research, a US insurance research and analytics firm focused on the property and casualty sector, has released a new report highlighting widening differences in the performance of residual property insurance markets across California, Florida, Louisiana, and Texas.
The company says that although the wider US property insurance market has returned to profitability, conditions within higher-risk states continue to follow very different paths.
In its latest biannual publication, Residual Property Market Trends in Four Higher Risk States, ALIRT points to a significant improvement in underwriting results across US property insurance during 2025.The homeowners insurance segment generated approximately $17 billion in underwriting profit, marking its strongest annual performance in more than ten years.
Despite this recovery, ALIRT says national figures do not reflect the pressures still affecting states with greater exposure to natural catastrophes. The company argues that developments within residual insurance markets offer a clearer indication of the health of local property insurance sectors and can reveal underlying issues not evident in nationwide results.
To assess these trends, ALIRT examined 15 years of data covering premium growth, policy numbers, net exposure and profitability across the FAIR Plans operating in California, Florida, Louisiana and Texas. According to the company, these measures illustrate how changing market conditions have influenced regulatory and legislative responses within each state.
ALIRT identifies California as facing the most significant challenges. The company attributes this to escalating wildfire losses over the past decade, with the situation becoming more severe following the Los Angeles wildfires in early 2025, which resulted in substantial claims for the California FAIR Plan.
According to ALIRT, participation in the California FAIR Plan had already been increasing rapidly before the 2025 wildfires and accelerated further afterwards.
The company reports that direct written premium approached $2 billion during the year, leading to a $1 billion assessment on admitted property insurers. ALIRT also notes that rates are expected to rise by almost 30% later this year.
In parallel, California has introduced a range of reforms designed to support the private insurance market, including greater flexibility in pricing models, additional liquidity measures and incentives linked to property risk mitigation.
ALIRT notes that Florida has experienced a markedly different trajectory. Following a series of legislative, regulatory and litigation reforms introduced from late 2022, Citizens Property Insurance Corporation has recorded its lowest participation level on record, according to the company.
The company also states that the insurer implemented its first premium reduction since 2015 during 2026, while the state has also seen new private insurers enter the market alongside stronger reinsurance capacity.
The report presents a more balanced outlook for Louisiana and Texas. ALIRT says Louisiana Citizens Property Insurance Corporation continues to recover after a sharp increase in policyholders following major Gulf Coast storms in 2020 and 2021. While legal reforms and financial incentives aimed at encouraging insurers to assume policies have supported the market’s recovery, the company believes some structural challenges remain.
In Texas, ALIRT describes the overall homeowners insurance market as relatively stable. According to the company, the combined share of homeowners premium held by the Texas FAIR Plan and the Texas Windstorm Insurance Association represented around 5% of the statewide market during 2025.
However, ALIRT notes that exposure within the residual market continues to increase, although this growth remains concentrated in heavily populated coastal regions rather than being widespread across the state.
ALIRT concludes that changes within residual property insurance markets may act as an early indicator of financial strain within the wider private insurance sector. According to the company, this is particularly relevant for smaller insurers with concentrated geographic exposure and less capacity to absorb major catastrophe losses, regulatory pressures or extended periods of market disruption.
The post ALIRT reveals contrasting residual property insurance trends across four high-risk US states appeared first on ReinsuranceNe.ws.
