For the first time in nearly a decade, Florida’s personal property insurance sector posted an underwriting profit in 2024, signaling a potential turnaround after years of financial strain, according to a new report released this week by AM Best, a leading global credit rating agency specializing in the insurance industry.

The analysis, which evaluated 45 insurance companies that dominate the Florida homeowners and personal property insurance space, revealed a substantial improvement in both underwriting performance and overall operating income. Notably, the review excluded large national carriers but included firms that had previously gone insolvent in the state.

Among the actively operating Florida-based insurers (excluding the state-run Citizens Property Insurance Corporation), the average combined ratio—a key metric indicating underwriting profitability—dropped to 93.1 in 2024. That marks a notable improvement from nearly 100 in 2023. (A combined ratio under 100 indicates profitability, while over 100 indicates a loss.)

Total underwriting gains reached $207 million in 2024, representing a dramatic shift from the $174 million in losses recorded just a year prior.

Reforms and Market Realignment Fuel Gains

According to Josie Novak, a senior financial analyst at AM Best, recent legislative reforms in Florida have played a pivotal role in reshaping the insurance market landscape. “The state’s legal and regulatory changes have provided a significant boost for long-standing market players and also created a more attractive environment for new insurers to enter the market,” Novak explained. “The withdrawal or scaling back of operations by some companies has made room for newer firms to gain traction, contributing to a realignment of competition and capacity in the region.”

Florida’s property insurance sector has historically been challenged by high litigation rates and the enormous costs associated with hurricane-related damages. Lawmakers have introduced several reforms in recent years aimed at addressing these issues, including changes to assignment of benefits (AOB) laws and restrictions on certain types of claims litigation, both of which have been blamed for driving up insurers’ loss ratios.

Steady Growth in Premium Volume

The financial data also shows a robust increase in written premiums, which reflect the overall size of the market. Active Florida insurers saw direct premiums written climb from around $5 billion in 2020 to over $11 billion by 2024. This near-doubling in premium volume reflects both increased market demand and rising insurance rates driven by elevated risk exposure.

Although the current data paints a more optimistic picture than previous years, AM Best was careful to note that challenges remain. “While the market is beginning to exhibit signs of greater stability and improved financial performance, the persistent threat of hurricanes continues to pose a significant risk to insurers operating in Florida,” the report cautioned.

Heavy Reliance on Reinsurance

Another key point raised in the report is Florida insurers’ heavy dependence on reinsurance to manage catastrophic risk. The aggregate reinsurance leverage for active Florida insurers was reported at 519.4% in 2024—vastly higher than the 62.2% average for personal property insurers across the United States. This disparity underscores Florida’s heightened exposure to natural disasters and the state’s dependence on reinsurance markets as a critical risk mitigation strategy.

AM Best’s findings align with previous research published in 2024 by S&P Global Market Intelligence, which also showed signs of recovery in the financial performance of Florida’s top 50 property insurers. Those improvements, too, were attributed to the ripple effects of recent state legislative initiatives aimed at stabilizing the volatile insurance market.

The full AM Best report includes additional analysis on profitability trends, market competition, and capital structure, and can be accessed through the firm’s official website.