Florida Reinsurance Buyers Found Ample Property Capacity at Mid-Year Renewals

Reinsurers have gained confidence and returned to the Florida market as a result of recent legislative reforms that have transformed the state’s risk landscape, according to brokers Aon and Gallagher Re in their mid-year renewal reports.

“Florida entered the mid-year renewals on a much sounder footing following recent legal reforms, stronger building codes, better catastrophe modeling and disciplined underwriting actions that have restored confidence in the local insurance market,” said Aon in its report titled “.”

“Florida and non-loss affected U.S. regional insurers also experienced broadly positive renewals after several years of challenging conditions, as underlying rating actions and portfolio management, along with legislative reform in Florida, have restored reinsurer confidence,” Aon added. (See related article: Reinsurance Renewal Prices Moderate as Capacity Exceeds Cedent Demand: Brokers).

Over the past few years, many reinsurers pulled back from the Florida market as a result of inadequate prices and inflated claims related to abuses connected with assignment of benefits (AOB). (An AOB is an agreement that transfers the insurance claims benefits of a policy to a third party, which often raised claims and costs. Such agreements have been curtailed by the Florida legal reforms).

These legal reforms “have successfully reduced property litigated claims by a substantial margin,” creating a more predictable and stable environment, which has increased reinsurers’ confidence in the Florida market, said Gallagher Re in its report titled “.”

“This newfound confidence has led reinsurers to reassess their view of risk and adjust their strategies,” Gallagher Re said, noting that many reinsurers that “previously scaled back their operations or exited the market are now reconsidering their positions.”

“The improved risk environment has reinsurers eager to expand their portfolios and capture market share in a region that is now perceived as less volatile,” Gallagher Re added.

Aon explained that the claims from Hurricanes Milton and Helene in 2024, which generated insured losses of approximately $41 billion, proved the effectiveness of the legislative reforms in Florida and boosted reinsurers’ confidence in the state’s property market.

“Claims from the two storms have performed in line with expectations and have not led to the late development of losses, known as loss creep, experienced following previous hurricanes, including Ian in 2022 and Irma in 2017,” Aon said.

Improved Insurer Health

Aon said the “orderly nature of this year’s mid-year renewals reflected the improved health of the underlying market.”

Indeed, during the January 2025 renewals, Gallagher Re indicated that both insurers and reinsurers have benefited from repricing of primary portfolios.

For the most recent renewal period, Aon pointed to the improved performance seen by ceding companies in Florida. “A composite of 50 Florida insurers analyzed by Aon reported net income of $402 million in Q1 2025, representing almost 50% of reported net income at year end 2024,” Aon said.

Aon noted that the composite’s median combined ratio improved to 76.7% in Q1 2025, compared to 92.9% at year-end 2024, while policyholder surplus increased by $476.9 million, or up 6.8% from year end 2024.

Rising Reinsurance Demand

As a result of improved conditions in Florida, cedents found there was adequate reinsurance capacity to meet their increasing demand. Aon attributed rising demand to a combination of inflation, catastrophe model changes and the depopulation of Citizens, the state’s windstorm insurer of last resort.

“The depopulation program transferred more than 428,000 Citizens policies to the private insurance market in 2024, generating additional limit demand from insurers,” commented Aon. “As of April 30, 2025, Citizens had close to 809,000 policies in force, down from a peak of 1.4 million policies in September 2023.”

During the mid-year renewals, Aon noted that overall reinsurance capacity was more than sufficient to absorb a near 10% increase in global demand for property catastrophe limit, largely driven by insurers in the U.S. and the Citizens’ depopulation program.

Florida Renewal Pricing and Policies

Both Aon and Gallagher indicated that reinsurers rewarded good performance from insurers in the Florida market by providing more favorable pricing and terms and conditions.

Pricing continued to moderate overall during the mid-year renewals, there was significant variation in renewal outcomes as reinsurers differentiated by cedents’ loss experience and performance, said Aon, referring to the mid-year renewals in general. (June 1 and July 1 are key renewals for U.S. national insurers and Florida business as well as insurers in Latin America, Australia and New Zealand).

Conditions at the mid-year renewals were broadly favorable, Aon added, “with moderate price reductions and more flexible terms.”

“Overall, risk-adjusted rate reductions were in the high single digits on average, although pricing varied depending on loss experience. Outcomes also reflected renewal strategies, with insurers who engaged the market early were able to achieve better terms and pricing,” Aon continued.

Aon went on to say that reinsurers were more willing to consider changes to program structures, including lower attachment points and retention levels, as well as broader coverage.

“In a bid to meet premium growth targets, reinsurers were willing to move down programs, increasing competition for lower layers. As a result, supply at the top of programs tightened,” Aon said.

Gallagher Re provided some additional observations about the June 1 Florida-focused renewals, including:

During the marketing phase, reinsurers signaled a desire to grow with some re-entering the market after previous cutbacks.
Quotes were generally risk-adjusted flat, though some markets that had previously leaned furthest into the hard market sought additional increases.
More reinsurers were willing to write across the board, hoping to maintain (or grow) their market share on programs. “However, in some instances, this capacity was not taken up on bottom layers as cedents gave preference to incumbents who paid a loss.” (While other reinsurers, seeking market share, offered to underwrite those lower layers, cedents opted to keep those layers with the incumbents that had paid a loss in the prior year, a Gallagher representative further explained.)
Programs were often oversubscribed, allowing for the removal of certain unfavorable terms and conditions.
There was an overall risk-adjusted price decrease of -10.7% with decreases achieved across all layers. The average decrease on low layers was -9%, mid layers dropped by -12%, and upper layers by as -20%.
Strategic buydown layers were available, enabling clients to reduce retentions year-over-year in Florida.

Topics Florida Reinsurance Property

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