Eight New Florida Property Insurance Companies Amid Market Shakeup
In a concerted effort to inject stability into Florida’s property insurance market, a fleet of eight new insurance companies has embarked on a mission to provide a reprieve from the soaring premiums and to fill the void left by the withdrawal of large national insurers. This proactive stance comes in the wake of an alarming 68% surge in home insurance premiums recorded between May 2021 and May 2023, positioning Florida at the pinnacle of the US in terms of homeowners’ coverage costs.
In a landscape defined by fluctuating uncertainties, Florida’s property insurance sector braces for a potential shift with the entry of eight new insurers, positioned as alternatives to the escalating premiums vacated by national giants such as State Farm, Allstate, and Farmers Insurance.
The optimism painted by the emergence of these entities is met with a palpable sense of skepticism among homeowners and businesses alike. The exodus of established, nationwide carriers has left a void, not just in coverage options but in the trust and reliability perceived by the policyholders. While these newcomers have been vetted for financial stability by state regulators, the looming question remains: will they stand firm in the face of major catastrophes, and can they deliver the claims service expected by their clients?
The departure of household names has sown seeds of doubt about the effectiveness of the emerging players in providing much-needed relief and stability. Amidst this backdrop of uncertainty, the consensus among residents is tinged with wariness. They find themselves wedged between escalating costs and the apprehension regarding the adequacy of these neophytes in addressing significant losses—a sentiment that threatens to ripple through the real estate market and beyond, potentially exacerbating the insurance crisis rather than alleviating it.
Orion180 Insurance Company
A shining example is Orion180 Insurance Company, which was founded in 2017 and has carved a niche in the market as one of the nation’s fastest-growing companies. With a colossal growth rate of 2,441% between 2019 and 2022, Orion180 has secured its spot on the prestigious Inc. 5000 list, ranking third among peers in the insurance sector. Servicing Alabama, Florida, Mississippi, North Carolina, and extending beyond to Georgia and Indiana, Orion180 is known for Orion180 Select Insurance Company, its specialization branch.
Ovation Home Insurance Exchange
Ovation Home Insurance Exchange, scheduled to start underwriting policies by June 2024, brings new hope with a fresh business model as a Florida domiciled reciprocal insurer. It will function as an association of its subscribers, backed by the expertise of Windward Risk Managers – the seasoned team that steered Florida Peninsula and Edison Insurance companies with a combined written premium of over $1.1 billion, serving 250,000-plus policyholders.
The Promising New Entrants
Among the promising are:
- Manatee Insurance Exchange, a commercial and personal line insurer, spun off from Safepoint Insurance Co. It has been recognized with an A Exceptional rating by Demotech, heralding a strong entry into the Florida market.
- Condo Owners Reciprocal Exchange (CORE) takes aim at commercial residential policies, sponsored by the reputable HCI Group, boasting a Demotech A (Exceptional) Financial Stability Rating.
- Orange Insurance Exchange, which began operations on July 25, 2023, provides commercial residential and homeowner insurance solutions.
- Other noteworthy names include Mainsail Insurance Company, celebrated for its Excellent ratings by AM Best, and Tailrow Insurance Co., which was recently green-lit by the Florida Office of Insurance Regulation.
Florida Property Insurance Newcomers Between Favorable Laws and Market Perils
Despite the favorable conditions these insurance companies enjoy, particularly post-legislation intended to curb insurers’ lawsuit expenses, challenges persist. They face natural catastrophe exposure, high reinsurance dependence, and market volatility. Yet, the promise of an unburdened legal standing and a private market capacity gap offer a silver lining for these newcomers.
As the story of Florida’s insurance sector continues to evolve, the introduction of these new players brings innovative approaches aimed at alleviating the burden of high insurance costs for homeowners. However, the shadow of rising consumer skepticism could significantly impact the real estate market, despite the financial strength and strategic efforts of these companies promising a more varied and competitive landscape.
