Florida Homeowners Insurers Pass Stress Test
The Florida Office of Insurance Regulation released a report summarizing the results of its annual reinsurance data call and stress test. Under the stress test, residential property insurers are required to identify how their reinsurance programs would respond to several hurricane scenarios, including a single large event or multiple smaller events. According to the OIR’s report, every residential insurer that it reviewed has enough reinsurance to withstand a 1-in-100 year storm. In addition, every insurer has enough reinsurance protection to enable it to withstand a repeat of the 2004 hurricane season, in which four events affected the state. The OIR notes that the models used in the projections are not definitive and only provide estimates, but it nonetheless found the results encouraging, particularly as insurers have added surplus after a series of storm-free years. Insurance Commissioner Kevin McCarty said, “Florida’s insurance companies have benefited from an influx of capital into the reinsurance market, which has allowed them to lower rates, boost surplus and protect against catastrophes.”