OIR, CFO Comment on Property Insurance Rates
The Florida Office of Insurance Regulation responded to Chief Financial Officer Jeff Atwater’s request for an analysis of whether insurers are reflecting reduced reinsurance costs in their rate filings. Based upon a detailed review of filings that have been made by insurers among Florida’s Top 30 in writings, the OIR has concluded that insurers indeed are passing along the cost reductions they have seen from favorable reinsurance market conditions over the last year. Of course, this comes as no surprise as Section 627.062 and the OIR’s filing process have long taken into account insurers’ most recent reinsurance costs as part of rate filings.
The OIR points out that 15 of the Top 30 writers have made rate filings. Insurers are required to file at least once each year, and the remaining 15 insurers have not yet reached their filing anniversaries but will fairly soon. Of the 15 insurers that have made filings, six requested overall rate decreases. Two received increases, but the OIR indicated that the increases were less than they otherwise would have been due to the insurers’ reinsurance cost savings. In all cases, the insurers showed reduced reinsurance costs as compared to their prior filings. (The remaining filings among the 15 that have been made either remain pending or have been withdrawn and will be resubmitted).
The OIR’s analysis concludes that Floridians are seeing the benefits of reduced reinsurance costs and that the market as a whole is “more robust and competitive.” The OIR points to rate moderation, increased private market writings, and a reduction in Citizens Property Insurance Corporation’s policy count as signs the market has improved recently.
Chief Financial Officer Jeff Atwater thanked the commissioner’s office for its efforts and described the key takeway as the OIR’s expectation that filings will reflect reduced reinsurance costs. The CFO points out that he does not want insurers to put themselves at greater risk or to fail to purchase adequate reinsurance, but he wants to make sure that Floridians are receiving the rate relief that is warranted.