AM Best, an international credit rating agency and provider of insurance industry analysis, reports a significant turnaround in the financial performance of Florida-based personal property insurers, which generated nearly $1 billion in underwriting profits after recording underwriting losses of $132 million two years ago.
The findings are published in AM Best’s latest market segmentation report titled Florida reform a positive development; underwriting discipline remains critical. The report surveyed 51 Florida-registered insurance companies, focusing primarily on personal property business within the state.
AM Best said the analysis excludes companies linked to large national insurance groups as well as Citizens Property & Casualty Insurance Company (Citizens), while also including insurers that have merged or fallen into financial distress in recent years to maintain consistency in historical comparisons.
AM Best said improving market conditions were supported by lower litigation activity and lower claims demands, which encouraged new insurers to enter the Florida market and enabled existing carriers to recover from earlier losses. The company also cited increased pricing complexity as a contributing factor.
“Florida’s improving property insurance landscape reflects a decline in litigation and claims filings, attracting new underwriters to the state while allowing existing underwriters to recover from losses in previous years and take advantage of more sophisticated pricing techniques,” commented AM Best Senior Financial Analyst Lauren Magro. “While 2024 marked the first time in more than a decade that the segment posted an underwriting profit, 2025 results further continued this trend and benefited from hurricanes that did not make landfall.”
AM Best notes that Florida insurers continue to rely heavily on reinsurance as the state is regularly exposed to hurricanes and severe weather events. The company said reinsurance pricing fell slightly during the mid-2025 renewal period, with more meaningful reductions expected during the 2026 renewal period.
The report also shows Florida insurers have much higher levels of ceded reinsurance leverage than the broader U.S. individual real estate market. AM Best said the average ceded reinsurance leverage ratio for the 10 largest active companies in the Florida Composite Index in 2025 was 562%, compared with an industry average of 55% for the entire U.S. personal property industry.
“As profitability stabilizes and major carriers’ balance sheets strengthen through substantial capital appreciation, coupled with tighter underwriting guidelines, some negotiating power may shift back to the major carriers,” added Chris Draghi, director at AM Best. “However, expected reinsurance market trends remain subject to hurricane activity – a large-scale hurricane event moving through major Florida cities could change market dynamics.”
AM Best added that despite direct written premiums falling more than 44% compared to the previous year, Citizens remains the state’s largest personal property insurer. The company attributed the decrease to ongoing depopulation initiatives aimed at shifting policy to the private market.
The report also found that Florida insurers’ defense and cost containment expenses, often considered a measure of litigation-related expenses, fell to about $131 million. AM Best said that following legislative reforms introduced in recent years, this was down 68% from 2024 levels and almost 80% below the peak reached in 2022.
In addition, AM Best said insurance companies are making greater use of digital technology and data-driven tools to improve pricing accuracy and operational efficiency. The company noted that this has led to an increasingly competitive market, in stark contrast to recent years when insurance companies have significantly increased premiums in response to market volatility.
