Posted on Oct 14, 2023
Florida's insurance crisis is about to get even worse
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Posted 7 mo ago
Responses: 2
PO1 William "Chip" Nagel good day Brother William, always informational and of the most interesting. Thanks for sharing, have a blessed day!
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PO1 William "Chip" Nagel
..."This, Liao said, could mean a stronger backstop provided by the Florida Hurricane Catastrophe Fund (FHCF)—the public reinsurance program in the state—"but with the caveat that the FHCF is not perfect because it pools correlated risk in a single state."
Other potential solutions, which have not been fully tested, are new financial instruments such as catastrophe bonds, reinsurance sidecars, collateralized reinsurance that transfer the risk to the broader capital market, or a public reinsurer on a national scale.
"Any policy intervention will take time to have an effect on the market, just like the overhaul in the last two legislative sessions are taking time to be seen in the marketplace," Nyce said.
"The good news is that insurer losses are getting better—still seeing losses, but not nearly what they saw over the last few years," he added. "New insurers are forming, and Citizens may be shedding some policies. All of that points toward a stabilization of the market. That needs to happen before consumers start to see competition leading to some premium relief."
..."This, Liao said, could mean a stronger backstop provided by the Florida Hurricane Catastrophe Fund (FHCF)—the public reinsurance program in the state—"but with the caveat that the FHCF is not perfect because it pools correlated risk in a single state."
Other potential solutions, which have not been fully tested, are new financial instruments such as catastrophe bonds, reinsurance sidecars, collateralized reinsurance that transfer the risk to the broader capital market, or a public reinsurer on a national scale.
"Any policy intervention will take time to have an effect on the market, just like the overhaul in the last two legislative sessions are taking time to be seen in the marketplace," Nyce said.
"The good news is that insurer losses are getting better—still seeing losses, but not nearly what they saw over the last few years," he added. "New insurers are forming, and Citizens may be shedding some policies. All of that points toward a stabilization of the market. That needs to happen before consumers start to see competition leading to some premium relief."
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