The escalation in strength and frequency of named storms combined with the increase in property values in Florida over the past 20 years have culminated in substantially higher losses hitting carriers’ balance sheets. Meanwhile, carriers have not charged adequate rate to cover these additional expenses.

The result, when combined with other catastrophic events, has led carriers to reduce volatility on their balance sheets by either exiting the market entirely or cutting back limits and raising rates. Research on Florida’s insurance situation done by Jerry Theodorou and R Street Institute indicates that while the average combined ratio in the U.S. is 103%, in Florida it’s 120%.

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