The Insurance Stability Lever
According to Jeff Brandes and John Rollins, the hardest part of leadership is often noticing old problems hiding in plain sight.
Florida's property insurance market is showing signs of improvement, with new insurers entering the state and reinsurance prices falling.
Florida will always be risky – just recall the past few years.
However, the high premiums paid by homeowners are not solely due to weather or court-related issues, but also the way the Florida Hurricane Catastrophe Fund is utilized.
- Retention and premium formula determine the amount of homegrown protection insurers can buy.
- Insurers are forced onto the expensive global reinsurance market, spending 30% or more of each resident's premium dollar.
This results in increased costs being passed on to residents.
Author's summary: Florida's insurance market is improving, but premium costs remain high due to the state's insurance pool management.