"We thought the more boots we could have on the ground here, the better we could serve our Florida clients," Mr. Stokes said.

Throughout the last decade, national insurers have reduced exposure in Florida. In the meantime, 45-50 domestic carriers have entered the market to pick up the slack. These carriers rely heavily on reinsurance, Mr. Stokes said.

Though reinsurance rates have declined, the cost to insurers "remains a significant component in ratemaking," Mr. Stokes said.

Regulators have acknowledged reinsurance costs as one of a handful of cost-drivers for the state's property insurers. The cost has been cited in multiple rate filings recently.

Legislation passed in the state two years ago is designed to eventually eliminate what was a $12 billion optional, temporary layer of the Florida Hurricane Catastrophe Fund (FHCF). Insurers were required to purchase the cheaper reinsurance from the fund, with the idea that premiums would decrease for policyholders. That did not pan out, and now the layer will be reduced $2 billion each year for six years and the price of the coverage will increase.

Mr. Stokes said that currently the price of reinsurance from the optional layer is close to that offered by the private market, prompting insurers to switch.

The FHCF estimates about $6.4 billion of risk was returned to the private reinsurance market in 2009.

This year Florida regulators are not requiring companies to carry catastrophe reinsurance for any specific probable maximum loss, such as the traditional 1-in-100 year level. The Office of Insurance Regulation (OIR) said it is instead looking to ensure companies can withstand multiple storms.

While some companies may still need reinsurance at the 1-in-100 year level due to their exposure, Mr. Stokes said others are "recognizing it is important to buy sideways protection. We've seen a trend on that."

Florida is also the only state to allow a foreign reinsurer to post reduced collateral as long as it is highly rated and financially sound. The move has attracted Hannover Re and its Bermuda subsidiary, as well as XL Re Ltd.

The theory is that more capital to the market will result in more competition and better prices for the marketplace. Whether that happens, and when, remains to be seen, Mr. Stokes said.