Property insurers in Florida suffering from heavy losses
Insurers serving the Sunshine State's homeowners have reported net income losses of more than $500M for the first half of 2021.
Insurers that provide residential property insurance in the Sunshine State reported aggregate net income losses of $285.3 million during the second quarter of 2021, according to an S&P Global Market Intelligence analysis of regulatory filings. The period represents the fifth-straight quarter of triple-digit aggregate losses for insurers operating in the Florida homeowners market, with year-to-date losses totaling more than $500 million.
The analysis examined 51 insurance subsidiaries and excluded national carriers. Of the carriers analyzed, 36 reported net losses for Q2 2021, with Southern Fidelity Insurance Co. citing the most significant net loss for the quarter at $40.4 million. However, S&P did note that Southern Fidelity was among a small group of companies that received regulatory approval to cancel or non-renew policies this year.
In an effort to improve Southern Fidelity’s financial condition, regulators set a restructuring plan that included additional capital contributions that have reached $47 million so far in 2021. Other insurance companies, including FedNat Insurance Co. and Lighthouse Property Insurance Corp., have also received net capital contributions this year amid decreases in policyholders’ surplus, according to S&P.
In the first half of 2021, FedNat’s policyholders’ surplus declined significantly, leading to a net loss of $60 million. Lighthouse Property Insurance saw its policyholders’ surplus decrease by $14.9 million for the same period.
For its evaluation, S&P calculated net capital contributions as the sum from the change in surplus notes, paid-in capital changes and paid-in surplus adjustments reported within income statements.
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