For the fifth year in a row, Florida — considered a major segment of "hurricane alley" — has avoided the devastating damages that come with the vicious storms. This has been a welcome respite from the back-to-back seasons of 2004 and 2005 that resulted in deaths and billions in claims.
Although the reprieve has meant that the cost of reinsurance in the private market has begun to slide downward, Florida's property insurance market remains as volatile as ever. The latest analysis put together by the Office of Insurance Regulation (OIR) says that a majority of companies operating in the Sunshine State continued to post underwriting losses this year.
While there has been some controversy about how some carriers have structured their business operations — including whether they are purchasing too much reinsurance — those in the industry say a variety of factors, including wind mitigation discounts credits, replacement costs, and the growing number of sinkhole claims continue to make it hard to regain ground during years without storms.
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