Chris Dittman, executive managing director and head of Florida operations at brokerage group Aon, believes the Florida property catastrophe reinsurance market is the healthiest and most stable it has ever been, citing stronger balance sheets, solid underwriting results, improved capital levels and continued stability following recent reforms.
In an AM Best analysis briefing on the state of Florida’s real estate market, Dittman said the current environment in Florida is very healthy from both an insurance and reinsurance perspective.
“I think this is the healthiest, most stable market I’ve seen in all my years of doing business in Florida,” he said. “The balance sheet has been strengthened, driven by strong underwriting profits, reduced loss costs and strong interest rate adequacy.”
Dittman continued, “Aon tracks more than 50 individual Florida-focused property and casualty insurance companies, and within this group we have seen statutory surplus levels grow from a total of about $4.5 billion five years ago to $92 at the end of last year. Billion-plus. So that’s a significant increase in balance sheet strength. And that’s before taking into account any profits generated by carrier MGA, carrier reinsurance captives and their affiliates, which have taken a lot of risk in terms of retention. So the growth in capital has really brought stability to the portfolios of these carriers in terms of the optimization and reinsurance efforts that we’ve seen in the past, resulting in unsustainable policy churning and renewal churn, so those are great.
“We see historically low leverage in this composite group. In 2025, our ratio of net written premiums to surplus levels was 1.15, which is the lowest we have seen in many years. Additionally, we see a significant surge in risk-based capital levels, from 450% at the end of 2023 to nearly 690% at the end of 2025. So the view that risk-based capital enables significant growth in balance sheet strength.”
AM Best Senior Financial Analyst Lauren Magro also talked about how the Florida real estate market is becoming a healthier operating environment.
She highlighted some specific indicators that led AM Best to conclude that Florida’s personal property insurance market has truly entered a stabilizing phase.
Magro said: “In addition to the significant improvement that we have seen from an operating performance perspective, we are also looking at some indicators and several factors to indicate that the market is truly stable. I mentioned tort reform and DCC The impact on costs, which is a good indicator for us, is that litigation-related expenses faced by Florida insurers have declined significantly in the years since tort reform was passed, as well as the impact on market dynamics in the form of new forms of increased competition, where even carriers that pulled out of Florida during volatile times are likely to re-enter the market and resume contracting business in the state, all of which point to a healthier contracting business environment.
“The other thing we’re looking at from a balance sheet perspective is significant new capital generation. The overall change in earnings over the past five years compared to paid-in capital suggests that by 2025, these Florida consolidated companies will have over $1.5 billion in earnings, but only 21% of that will be driven by paid-in capital. If you look back at 2021 and 2022 “In years like this, all the external capital was flowing into the market, and insurance companies were still struggling to grow and even stay in the black during these years, so we saw a meaningful shift after the reforms were implemented.”
Insurers are now able to generate new capital through real operating income, she explained, indicating improved balance sheet strength driven by stable and improving operating performance.
Magro added: “Finally, while 2025 results did benefit from a mild hurricane year, looking back at 2024 The company reported solid underwriting profits despite suffering losses from three major hurricanes – Hurricane Milton, Hurricane Helen and Hurricane Debbie, which cumulatively caused significant losses across the state. So this is really evidence that they have been able to remain profitable under pressure, which is an indicator of real rate adequacy that they are now better able to absorb these losses due to changes in the operating environment, a renewed focus on underwriting discipline, risk management, risk selection and an overall healthier operating environment.”
The main takeaway, Magro said during the call, is that Florida is different today than it was just a few years ago.
She noted, “Sustainability of the reforms appears to be there, but challenges are coming. It’s not going to be smooth sailing as things are going well and going well into 2025. I think insurers are likely to face a lot of hurdles in the coming years.
“Underwriting discipline, maintaining effective risk management to mitigate future challenges, and remaining conservative in business practices and the decisions these carriers and these Florida composites companies make every day will go a long way toward the continued sustainability of the market.”
Guy Carpenter, the first broker to report on mid-year renewals, revealed that risk-adjusted property catastrophe pricing is generally down 15% – 20% across multiple tiers, with Florida clients receiving more than 12% more reinsurance capacity than this time last year.
The reinsurance broker said Florida insurers achieved generally good results at renewals in June, driven by significantly stronger balance sheets, improved underwriting results and continued investor interest in Florida risks.