Unraveling Florida’s Insurance Exodus: Weather or More?

florida insurance

Florida, a state synonymous with sun-kissed beaches and, unfortunately, hurricanes, is caught in a whirlwind of an insurance crisis. Insurance companies seem to be abandoning ship despite a 2023 mild hurricane season. The exodus begs the question: What’s really prompting these insurers to run for the hills?

Weather Warnings vs. Reality

The threat of hurricanes has long cast a shadow over the sunshine state, prompting persistent fears that insurers are dwindling due to natural disasters. And indeed, the increased risk of such events has influenced insurers’ decisions. But to attribute the fleeing of insurance providers solely to Mother Nature would be an oversight.

A Tug-of-War with Reinsurance

A significant facet of the ongoing insurance debacle in Florida could be the discord between reinsurance firms and their client insurance companies. The crux of this tension could lie in the reinsurance sector’s perception that the property casualty market has moved too slow in the imperative of rate increases and stringent underwriting policies. From the vantage point of the reinsurers, the heart of the matter is twofold: insurance companies are seemingly entrenched in high-risk areas such as Florida and California, while in the past, there has been some procrastination on the necessary escalation of rates and the proliferation of policy underwriting.

Basically, the property casualty market just got their insurance bill, and the rates skyrocketed.

It could be looked at that reinsurance companies are not arbitrarily inflating prices; instead, they’re correcting what has been an underestimation of risks. This catch-up results in increased premiums for insurance companies and, subsequently, for consumers.florida insurance crisis

The Climate Impact’s Economic Ripple

An unsettling insight into the climate change repercussions surfaces as Swiss Re acknowledges the strain on their profits. With the climate crisis no longer a distant narrative, it has ventured to consumers’ doorsteps, signaling an inevitable confrontation with its fiscal outcomes.

“To a certain extent, what we see here … is the price for climate change for the first time coming at the door of regular consumers,” Christian Mumenthaler, CEO of Swiss Re pointed out in a CBS interview.

Legal Battles – Litigation or Exaggeration?

Lawsuits in Florida have been named a scapegoat for the insurance upheaval. However, statistics suggest a contrary narrative. With litigated claims in Florida being less than 8% of all closed in 2022, their financial impact appears modest compared to the premiums collected statewide, which was close to $16 billion in premiums paid .

A Solution in Diversification?

One notion gaining traction is the decentralization of risk, a move that encourages more insurance companies to engage in the Florida market. This strategy aims to mitigate the concentrated risk reinsurance companies currently are witnessing, potentially leading to a recalibration of insurance and reinsurance rates alike.


The insurance landscape in Florida seems to be a complex tapestry woven with threads of climate unpredictability, reinsurance recalibrations, and political finger-pointing. Amid this turmoil, the plausible remedy might just lie within incentivizing a broader range of competitors in the insurance arena, ultimately dispersing risk and crafting a stable market ecosystem.

While it may appear to be weather driven, it’s not as clear cut as one may think. Meanwhile, consumers are left to deal with the stark reality that as the insurance crisis escalates, so will the costs and non-renewals—making it more crucial than ever to confront issues proactively.

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