Simon Glairy stands at the intersection of traditional risk management and the evolving world of Insurtech, bringing years of perspective on how catastrophic events reshape the global insurance landscape. In the wake of the fifth anniversary of the Surfside tragedy, we discuss the current stalemate at the site where Champlain Towers South once stood. We explore how a $1.6 billion project came to a standstill, the shifting requirements of underwriters who now demand local expertise over mere capital, and the broader health of a Florida property market that remains sharply divided between macro-stabilization and extreme localized caution. Our conversation moves through the intricacies of the massive settlements that rewrote the industry’s rulebook and the vital importance of what experts are now calling emotional due diligence.
High-rise residential projects in Florida currently face insurance rates up to five times higher than comparable commercial risks. From your perspective, why has the residential sector become such a restricted class, particularly on the South Florida coastline?
The disparity we see today is a direct haunting of the pre-dawn darkness in June 2021, when 98 lives were lost in the Champlain Towers South collapse. Underwriters no longer view these coastal high-rises as simple property risks; they see them as potential billion-dollar liabilities waiting to happen. While the broader Florida market is showing signs of recovery, residential for-sale properties like condominiums are viewed through a lens of extreme skepticism because of the permanence of the risk. We are seeing rates run two to five times higher than commercial risks because the excess casualty capacity is tightening, leaving developers in a position where they simply cannot find enough cover. This isn’t just about the physical concrete and steel anymore, but about the litigation-heavy environment where social inflation can turn a structural failure into a “thermonuclear” verdict.
The $1.02 billion settlement following the Surfside tragedy involved 31 different defendants. How did the sheer scale and distribution of that payout fundamentally alter the underwriting standards for construction firms and their contractors?
That billion-dollar settlement acted as a seismic shift in how risk is priced, largely because it drew from the balance sheets of such a diverse group of 31 defendants. When you see a security company’s carriers, including giants like AIG, Zurich, Chubb, and Liberty Mutual, paying out a staggering $517.5 million, it sends a chill through the entire service sector of the construction industry. Even the neighboring developers and general contractors were not spared, contributing $84 million and $157 million respectively through their insurers. Underwriters now meticulously scrutinize every relationship on a project site, from the security contractor to the neighboring engineering firms, knowing that a single failure point can trigger a massive multi-party loss. This has led to a market where the “underwriting room” demands a level of transparency and historical loss data that was previously unheard of in South Florida residential projects.
Damac Properties spent $120 million on the Surfside site but has struggled to secure construction cover or sign a single contract. What does their current impasse reveal about the dangers of entering the Florida market without a local development partner?
The situation with The Delmore project is a textbook example of how capital alone is no longer enough to break ground in a sensitive, high-risk market. By attempting to develop this 1.8-acre site without a domestic partner, the Dubai-based developer essentially walked into an underwriting vacuum where they lacked the necessary carrier relationships and a local track record. Brokers have noted that local partners are the “keys to the door” for domestic carriers and Lloyd’s syndicates, providing a verifiable loss history that international firms simply cannot replicate overnight. Because they lacked that local anchor, Damac missed crucial sales seasons and even saw a $200 million unit deal fall apart because legal teams couldn’t verify fund sources in time. It proves that in the post-Surfside era, the market rewards local knowledge and established trust far more than it rewards a high-profile international brand.
Federal investigators recently found that the original Champlain Towers structure was built to less than half the code-required strength in some areas. How do these technical findings from NIST impact the way insurers evaluate older properties versus new construction on the same ground?
The NIST findings are a sobering reminder of the “hidden” risks that can lurk within a structure from the very day it opens, as was the case back in 1981. Knowing that the collapse actually began several weeks before the catastrophe, specifically at the connections between garage columns and the pool deck, has forced underwriters to demand more than just standard engineering reports. Carriers are now looking for granular structural details and long-term reserve studies that can prove a building’s integrity over decades, not just years. For new projects on the same ground, the scrutiny is even more intense because they are being built under the shadow of a failure that was present for forty years. This has shifted the underwriting conversation away from mere compliance toward a rigorous, almost forensic level of structural due diligence.
Florida’s Office of Insurance Regulation reported a significant deceleration in rate increases, yet coastal high-rises in Miami-Dade seem excluded from this trend. Why is there such a disconnect between the state’s overall market improvement and the reality for luxury developers?
On paper, the Florida market looks like it is healing, with the state averaging just a 0.8% rate increase over the last two years and 17 new carriers entering the market since the 2022 legislative reforms. We’ve even seen Citizens Insurance, the state’s insurer of last resort, successfully shed policies down to about 336,000 as of March 2026. However, these statistics represent a broad average that masks the crisis still unfolding at the coastline, where the risk of catastrophic failure and “nuclear” litigation is highest. For a high-rise in Miami-Dade, the reputational weight and the specialized nature of the construction mean that the newly entered carriers are often unwilling to provide the necessary capacity. The market is essentially bifurcated: while a standard homeowner might see relief, a developer at the Surfside site is still facing a “restricted class” environment where capacity remains stubbornly tight.
A developer recently mentioned the need for “emotional due diligence” when working on high-stakes projects. How can insurance professionals and brokers integrate this qualitative concept into a quantitative risk assessment?
The concept of emotional due diligence is a fascinating shift in our industry, moving us beyond the traditional physical and financial checks. In the case of the Surfside site, it means acknowledging the grief and the community’s reaction to a project that sits just across the street from a banner memorializing 98 names. Brokers now have to demonstrate to underwriters that a developer is not just technically competent, but also socially and emotionally attuned to the environment, as this reduces the risk of project-stalling litigation and public backlash. If a developer launches a sales gallery prematurely or fails to engage the community, it creates a “reputational risk” that insurers find very difficult to price. Integrating this means looking at community engagement plans and public relations strategies as a core component of the risk profile, alongside the blueprints and the balance sheets.
What is your forecast for the Florida high-rise insurance market?
I anticipate that the market will remain deeply fragmented for at least the next twenty-four to thirty-six months. While we see some success stories—like the Four Seasons project in Surfside selling over $2 billion in units—those successes are predicated on having a development team with deep-rooted domestic credentials and impeccable carrier relationships. My forecast is that we will see a mandatory “partnership model” emerge, where international capital will be unable to touch Florida’s coastline without a seasoned local joint-venture partner to navigate the insurance hurdles. The legacy of the $1.02 billion settlement will continue to suppress excess casualty capacity for residential projects, making insurance the primary “go/no-go” factor for any new high-rise. Until more carriers feel comfortable with the long-term impacts of recent legislative reforms on social inflation, the “Surfside effect” will keep rates high and underwriting rooms extremely exclusive.
