AM Best has reported that a group of property insurers in Florida have hit a five-year performance and surplus low in 2020, and given persisting and significant market hurdles, the rating agency believes companies will find sustaining current surplus levels a challenge.
Despite no hurricanes making landfall in 2019 to 2020, Florida property insurance writers still posted a combined ratio of 131.5 in 2020, a 18.2 percentage-point deterioration from 2019.
According to the rating agency, both years reported greater volatility compared to 2017 to 2018 due to social inflation pressures, resulting in an increase of the severity of claims and litigation costs, as well as more-frequent severe convective storms and an increase in roof replacements.
