Newspaper article Sarasota Herald Tribune

Pressure on Property Insurers

Newspaper article Sarasota Herald Tribune

Pressure on Property Insurers

Article excerpt

Atwater's questions lead to overdue rate reductions

When it comes to Florida's property-insurance rates, what a difference a little pressure from the state's chief financial officer can make.

In 2013, most of Florida's property insurers, as usual, filed for rate increases -- despite eight straight years without a hurricane and sharp reductions in insurers' costs.

And why not? The state Office of Insurance Regulation had approved more than 100 rate-increase requests each year since 2009 - - many of them in double digits.

As result, Florida's average property insurance premium -- $1,933, based on 2011 figures -- became the highest in the nation, and double the national average, according to the National Association of Insurance Commissioners (NAIC).

Then, late last year, Florida CFO Jeff Atwater -- who oversees insurance regulation -- directed Insurance Commissioner Kevin McCarty to compile a report detailing how much property insurers had saved in 2013 and why consumers had not benefited.

Costs down, profits up

After all, besides avoiding hurricane-damage payments since 2005, Florida insurers had saved hundreds of millions when the cost of reinsurance -- the policies they buy to back up their claims -- fell by 20 percent or more.

The 10 largest Florida-based property insurance companies had made "$283 million in net underwriting profits through the third quarter of 2013," the Herald-Tribune's Zac Anderson reported at the time, citing NAIC figures.

And most of the property insurers were looking for more. Of the rate requests they filed with regulators through last October, 69 percent were for increases.

But, after Atwater asked for the report, things began to change.

McCarty reported in January that "a half-dozen of the state's 30 major property insurers have a recently approved or pending request for a rate cut between 2.4 percent and 9.2 percent," Jeff Harrington of the Tampa Bay Times noted in an article published Wednesday in the Herald-Tribune. …

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