Reforms fuel Florida insurance revival

Florida’s property insurance market is showing signs of stability after years of volatility, with reforms passed in 2022 and 2023 credited with attracting new capital, curbing litigation and allowing Citizens to reduce its role as the state’s insurer of last resort.

Industry executives, analysts and trade group leaders told The Insurer that conditions in 2025 are markedly different from just a few years ago, when litigation costs, soaring premiums and carrier exits left Florida in crisis.

REFORMS DRIVE TURNAROUND

Michael Carlson, president of the Personal Insurance Federation of Florida, said the December 2022 elimination of one-way attorney fees was the turning point.

"In 2022, after several years of partial law changes ... the legislature finally agreed to prohibit what was called the one-way attorney fee law," he said. "Since that has happened for property, the market’s completely changed."

He added the market was "deeply unbalanced" until that time, and "(it is) now right-sizing in terms of litigation volume, the cost of lawsuits, the predatory behaviors of certain segments in the vendor community".

Florida Office of Insurance Regulation data backs that up: personal insurance litigation dropped nearly 25% in the first half of 2025 compared with the prior year. Citizens' new claims lawsuits fell 34%, while legal spend dropped 17%.

"We're seeing a really different landscape now ... profitability in insurers' underwriting has returned, particularly in 2024, and there's less fear of litigation as there was in the past," Josie Novak, senior financial analyst at AM Best, told The Insurer.

NEW ENTRANTS AND CAPITAL INFLOWS

Seventeen new insurers have entered the Florida market since the reforms, with the most recent being Stand Insurance Exchange and Praxis Reciprocal Exchange, which were approved in mid-September.

Since the reforms, there is now more than $574 million in surplus to support expanded underwriting and premium growth.

Mark Friedlander, senior director of media relations at the Insurance Information Institute, noted Florida stands out nationally.

"There is no other state that is seeing that type of growth of new insurers entering the market ... in fact, the biggest trends we're seeing across the country are contraction and here we have Florida, the most hurricane-prone state in the country, and we have 17 new companies," he said.

He tied the growth directly to reforms.

"It's because the legal environment has changed so dramatically following the legislative reforms," he said.

A Citizens spokesperson told The Insurer that the Florida property insurance market "has rebounded", adding that many new insurance companies are entering the state since the significant changes, and existing companies are expanding.

CITIZENS SHRINKS AS PRIVATE MARKET EXPANDS

Citizens itself has seen a dramatic shift. After peaking at 1.4 million policies in 2023, the company has transferred hundreds of thousands of accounts back to private insurers.

"Citizens has reduced its policy count significantly and expects to see its policy count drop below 550,000 by the end of the year, its lowest levels since early 2021, as policyholders find coverage in the private market," a Citizens spokesperson said.

In 2024, the state-backed insurer ranked number 13 among the top 20 home insurers in the country, with $2.7 billion in direct written premiums, and was the number one insurer in the state of Florida, surpassing Universal Insurance and State Farm.

Friedlander also highlighted how much Citizens has shrunk recently.

"Citizens has cut its exposure in half in the last two years, and they could be well under 500,000 policies in force by year-end, which would be an amazing turnaround," he said.

APCIA reported that Citizens shifted 214,000 policies with $89 billion in exposure to private carriers this year, while 871,000 policies have been approved for takeout this autumn.

The financial turnaround has been equally striking. Citizens posted net income of $746 million in 2023, a sharp reversal from a $2.2 billion loss in 2022.

PREMIUM RELIEF FOR CONSUMERS

One of the clearest signs of improvement is in pricing. After years of double-digit increases, rates have flattened.

"Florida had the lowest average rate filing last year at 1% and the lowest actual premium increases of 1.7% in 2024," Friedlander said. "The average year-to-date premium increase in Florida is 0.5%, as flat as you could get."

He added: "Insurance agents are reporting their customers are getting better rates for the same level of coverage because the market is now competitive."

Carlson agreed.

"The rate trends were before we had rate increases being filed. Now we're seeing rate decreases being filed by property writers. This is a substantial change from the last 10 or 15 years."

APCIA noted that Florida had the lowest average homeowners increase in the U.S. in 2024, at just 1%. Auto insurers also cut rates by an average of 5.6% in 2025.

REINSURANCE AND FINANCIAL STRENGTH

Executives and analysts pointed to the hard reinsurance market of 2022 and 2023 as another challenge Florida carriers had to overcome.

"Companies had to contend with reinsurance pricing and the hardening of the reinsurance market," Chris Draghi, director at AM Best, said. "But they've adapted, with profitability improving particularly in 2024."

Looking ahead, they expect carriers to fund growth organically.

"Continued underwriting profitability, continued strong earnings, organic surplus growth ... companies are not going to be as reliant on capital contributions," Novak at AM Best said.

Executives said the reforms have given insurers confidence to re-enter even the riskiest parts of the state.

Friedlander pointed to American Integrity, which announced in August that it would start writing business again in the tri-county area encompassing Miami-Dade, Broward and Palm Beach, which accounts for more than one-quarter of the state’s population.

But analysts stressed that hurricane volatility and inflation remain risks. AM Best’s Novak said reforms and insurer discipline have made the market more predictable, but catastrophe exposure still looms.

After years of upheaval, Florida's insurance market is regaining stability. Litigation is down, new carriers are arriving, and Citizens is shrinking back toward its role as insurer of last resort.

While the state remains one of the most hurricane-exposed markets in the world, industry leaders say the reforms have given them confidence that profitable business can be written again.

As Carlson summed it up: the market has moved from "deeply unbalanced" to cautiously stable, which is a shift many in the industry once doubted was possible.

This article was updated to reflect that the 1.7% premium increases cited by Friedlander were in 2024, and not 2025.