Gallagher Re’s Adam Schwebach said sellers are actively engaging with Florida insurers as reinsurers adjust their risk assessment models in the wake of much-needed reforms in the state. The cautious element of cautious optimism is fading.
In an interview with Reinsurance News, Schwebach, head of North America real estate at reinsurance brokerage Gallager Re, discussed the Florida market and mid-year renewal prospects against the backdrop of reforms stabilizing the state’s real estate market in 2022 and 2023.
First, Schwebach expressed his expectations for Florida’s overall trends this year.
“The way I describe it, we’re going into 2025 with cautious optimism that the legislative reforms are being vindicated. There’s really starting to be solid data coming out of Milton. Helen was more of a Florida flood damage, but Milton is showing signs of like a normal hurricane. As expected, the damage is coming. You’re not getting the first notice of damage in history, with lawsuits attached, which has been commonplace before the reforms,” he said.
“I would say the cautious part of the cautious optimism is starting to evaporate as we move into 2026, and I would say everyone in the state is now actively looking to move forward and move into what they consider to be a very, very positive, stable insurance environment,” Schwebach added.
Schwebach said that positivity has also transferred to reinsurers, who are now looking at the state with renewed interest and are glad that the uncertainty of litigation and everything associated with it has been removed, ultimately making it easier for reinsurers to underwrite business in Florida.
“While we see all insurance companies actively looking to grow within the state, some (reinsurers) may say they want to remain relatively stable in the state and they already have sufficient capital, but I think most insurers will be happy to grow within the state by the middle of the year,” Schwebach said.
Looking forward, Schwebach sees the fact that reinsurers have adjusted Florida’s risk assessment models since the reforms were implemented as key.
“That’s where we can get a split view, depending on whether you talk to a company, a broker or a reinsurer, about the overall rate impact in any given year because reinsurers are passing on information behind the scenes and telling us that’s exactly what they do. They’re forced to include some load in their pricing from litigation, social inflation and all the buzzwords we hear, and they’re now reviewing those assumptions very aggressively and, in many cases, starting to reduce them.
“That in itself is going to have a very positive impact. That’s why I think you’re going to see a split in reinsurers’ views on rate differentials in any given year. I think we saw a little bit of that last year, but I think we’re going to see a little bit more of that this year. Last year, most brokers reported rates were down 15 percent. I think reinsurers are likely to look at that and say, actually, when we take some of these loads off, we’re probably going to see rates come down around five percent, which feels very positive,” he said.
Adding: “So I expect we’ll continue to see this trend in 2026 where reinsurers are re-evaluating the loads they’re putting into the Florida market and to the extent that they can re-underwrite the hurricane risk that they’re very good at, I think they’re very comfortable doing that. So I think all of that will lead to lower rates in the state in 2026.”
Prior to the reform, reinsurers were withdrawing from the Florida real estate market to avoid rising costs associated with post-event litigation, but with mid-2026 renewals quickly approaching, Schwebach noted that he is seeing reinsurers working with Florida insurers “the most proactively in years.”
“For example, last July the reinsurers came to us with some ideas and proposals for operators to consider for 6.1 this year. They are absolutely forward-looking and trying to work with the people they have been working with over the past few years and look for growth opportunities.
“It’s actually fun for clients to get a head start and start exploring some creative ways to think about reinsurance. For brokers, we love it because the fun of our job is creativity and helping people grow. Reinsurers are a really fun place to be in pitching ideas to brokers and cedants,” he said.
As highlighted in Gallagher Re’s January renewal report, property insurance, particularly property catastrophe reinsurance rates, are softening further at 1.1 at renewal in 2026, and with supply outstripping demand, Schwebach expects reinsurers who failed to hit their growth targets on January 1 to look for growth mid-year.
“I think it’s going to lead to more supply. I think it’s going to lead to greater reinsurer interest in the Florida business and mid-year renewals generally. So that’s all a very positive thing. Reinsurers are not going to waive any underwriting guidance and they’re not going to worry about pricing when they’re looking at hitting their revenue targets, but it’s going to be a factor that they need to consider,” Schwebach said.
Finally, Schwebach discussed what he sees as the key growth opportunities for Florida reinsurance/insurance companies.
“I think there are definitely opportunities underneath the funds. For those who are no longer writing under the FHCF, we did see some market return to this market last year. I think we’ll see an acceleration of that in 2026, and a lot of that has to do again with the certainty of the outcomes they’re seeing. If you go back in time, it’s not just hurricanes, but SCS events can also have a very negative impact on reinsurance programs where reinsurers didn’t anticipate that, historically SCS Events were largely driven by in-state litigation, and the fact that those events have disappeared is essentially no longer an issue for the underwriters and reinsurers who were providing coverage at the bottom of the curve, and I think that will make it certain that many of them will be on the decline.”
“The other thing that reinsurers have communicated is a willingness to consider structural creativity. Whether it’s adding some declining components or providing some overall coverage, I think there’s an argument that the ILS market is certainly willing to consider these types of structures now, and the traditional market needs to follow suit in order not to lose its edge,” Schwebach concluded.
