Florida's Overlooked Insurance Stability Lever
According to Jeff Brandes and John Rollins, the hardest part of leadership is often noticing old problems hiding in plain sight. Florida's property insurance market is seeing positive changes, with new insurers entering the state and reinsurance prices falling.
However, homeowners are still facing high premiums, prompting the question: "If the storm has passed, why is my premium so high?" The answer lies not in the weather or courts, but in the way the Florida Hurricane Catastrophe Fund is utilized.
The way Tallahassee uses our most powerful state-run insurance pool – the Florida Hurricane Catastrophe Fund – determines how much homegrown protection insurers can buy before they are forced onto the expensive global reinsurance market.
The Fund's "retention" and "premium formula" play a crucial role in this, with insurers spending 30% or more of each resident's premium dollar on global reinsurance and passing on the cost.
Author's summary: Florida's insurance market stability is affected by the state's use of the Hurricane Catastrophe Fund.
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