State Farm Insurance said this week that it is sticking with Florida and sees more opportunity there, thanks to the state's recent reforms for the industry, issuing a statement on the matter days after competitor Farmers Insurance became the latest insurer to reduce coverage in the state.
"State Farm plans to continue our substantial presence in the Florida insurance marketplace," the company said in a written statement to FOX Business. "Our current plans include a commitment to responsible growth so that we can maintain the financial strength to deliver on our promises to our customers."
State Farm's recommitment to The Sunshine State follows Farmers Insurance's move earlier in the week informing the Florida Office of Insurance Regulation (FOIR) that it would no longer offer Farmers-branded auto, home or umbrella policies in the state – impacting some 100,000 customers.
Florida's insurance market has experienced difficulties in recent years, with some private insurers becoming insolvent, and others choosing to halt coverage there altogether.
The Tampa Bay Times reported this week that "[m]ore than a half-dozen insurers have withdrawn from Florida or faced insolvency in the past 18 months, all as record Atlantic Ocean temperatures have spurred hurricane forecasters to boost predictions for an above-average season this year."
A spokesperson for Gov. Ron DeSantis' office told FOX Business in a statement the state's property insurance market "has been chaotic since 2007, when bad public policy forced insurers to flee Florida, and the state's insurer of last resort, Citizens, ballooned."
DeSantis press secretary, Jeremy Redfern, said that since that time, the main issue driving up costs for insurers in the state has been excessive litigation. So, in recent years, the state legislature passed a series of reforms signed into law by DeSantis to address the issues.
"Even the most aggressive reforms will take time to affect the insurance industry," Redfern said. "The 2021, 2022 and 2023 legislative efforts will be effective."
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DeSantis himself, a Republican who is also running for president in 2024, told the Howie Carr show Wednesday that the legislation passed in Florida's last special session addressing insurance reforms mean that "it now is more economical for companies to come in."
"I think they’re going to wait through this hurricane season, and then I think they’re going to be willing to deploy more capital to Florida," the governor said. "So, knock on wood, we won’t have a big storm this summer. Then I think you’re going to start to see companies see an advantage."
State Farm, the largest property insurer in the nation, appears willing to wait it out and see.
The company's statement added, "We are encouraged by the recent insurance reforms and efforts to curb legal system abuse, and we will continue to work constructively with the Florida Legislature and the Office of Insurance Regulation to improve the marketplace on behalf of our Florida customers."
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State Farm's double-down on Florida also comes two months after the company announced that it was ceasing new applications for property insurance and other policies in the state of California, saying that it had made the decision "due to historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market."
https://www.foxbusiness.com/markets/state-farm-doubles-down-florida-farmers-insurance-pulls-back
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