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As the 2023 Atlantic hurricane season approaches June 1, the National Oceanic and Atmospheric Administration is predicting “near-normal” activity.

The season’s expectations are mostly due to the fact NOAA scientists predict a high potential for the weather condition known as El Niño, which can inhibit the formation or prevent strengthening of hurricanes.

However, El Nino’s influence may be offset by other factors that are favorable to hurricane formation, such as warmer-than-normal sea surface temperatures in the Atlantic Ocean and Caribbean Sea, NOAA added in its latest update.

NOAA is forecasting a range of 12-17 total named storms, with 5-9 hurricanes (winds of 74 mph or higher) and 1-4 major hurricanes (Category 3 or greater). NOAA said it has a 70% confidence in these ranges.

The average hurricane season contains about 14 named storms, 7 hurricanes, and 3 major hurricanes.

The hurricane research team at Colorado State University in its early forecast of the 2023 Atlantic hurricane season predicted slightly below-average activity. CSU will release an update to its forecast on June 1.

AccuWeather meteorologists in late March predicted the 2023 season will have 11-15 named storms, four to eight hurricanes, and one to three major hurricanes.

NOAA said it is implementing upgrades and improvements, including expanding the capacity of its operational supercomputing system by 20% to run more complex forecast models.

The 2022 Atlantic hurricane season was close to average, with 14 named storms, eight hurricanes and two major hurricanes but one of those was Hurricane Ian – among the strongest hurricanes to ever make U.S. landfall on September 28 in Florida. Ian was also one of the costliest hurricanes in history in terms of insured losses, causing an estimated $60 billion. The storm will only trail 2005’s Katrina in insured losses.

Source: Aon via Triple-I



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Florida investigators have charged a former Progressive Insurance claims adjuster with fraud, alleging that she used claimants’ identities to submit fraudulent auto claims, then pocketed almost $24,000 in settlements.

Kiyuana R. Pasley, 41, of Homestead, was an adjuster at Progressive from 2019 to 2022. She’s now appointed with Integon National Insurance, part of National General Insurance, through 2024, according to the Florida Department of Financial Services’ online adjuster search tool.

The department said Friday that Progressive notified the department’s Division of Investigative and Forensic Services last November that Pasley had allegedly issued fraudulent payments to herself on personal injury protection auto claims. She resigned after the allegations came to light.

An investigation “revealed that Pasley hijacked up to 11 active claims without the knowledge of the insured,” DFS said in a news release. “She added false information to the claims regarding bodily injury, deductibles, and wage loss payments, before diverting the claim funds on the 11 claims to her personal bank accounts.”

Pasley held multiple bank accounts and deposited the ill-gotten gains through smartphone apps and through direct deposit, the department explained. She used her insider knowledge of the process to her advantage, before she resigned from Progressive in October, the state agency said.

Pasley was booked into jail in Miami, but was out of the facility by Friday morning, the inmate center indicated. She could not immediately be reached for comment Friday.


By Insurance Journal Staff Reports |

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Kin, Slide Say They’ve Completed Reinsurance Programs Ahead of June 1 Renewal

By Insurance Journal Staff Reports | May 26, 2023

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Two Florida-focused property insurers have announced they have completed their reinsurance programs, just days ahead of what some had warned would be a painful June 1 renewal deadline.

Kin Insurance Inc., a tech and data-heavy, direct-to-consumer insurer with offices in Chicago, and Slide, a Tampa-based homeowners insurer and insurtech company, said they had secured adequate reinsurance from multiple reinsurers before hurricane season begins next month.

Kin, which counts pro golfer Rory McIlroy among its investors, said in a news release that it had obtained a “remarkable” $860 million in reinsurance coverage for natural catastrophes, “protecting against a one-in-200-year first-event loss.”


The company utilized traditional reinsurance and catastrophe bonds for its program. “Completing this reinsurance program is a significant achievement, considering the challenging market conditions faced by primary insurers,” the company noted.

“The continued strong support from capital market investors and reinsurance partners validates our proactive, technology-driven approach to support policyholders, prevent losses, and better handle claims,” said Angel Conlin, chief insurance officer at Kin.

The completion comes two months after Kin announced it had raised $109 million in Series D capital investments. The move also comes 10 months after Kin Interinsurance Network submitted use-and-file rate increases of of 61.5% for HO-3; 84.3% for DP-3; and 103.2% for condominium policies. Conlin said at a March rate hearing that the large numbers reflect soaring reinsurance prices, competitors’ recent rates, Kin’s surplus levels and a need to keep the company on a sound financial footing. Kin’s HO-3 rate increase affected some 27,150 homeowners, raising their annual premiums an average of $1,395, the filing shows.

Slide Insurance, helmed by former Heritage Insurance CEO Bruce Lucas, said its completed tower exceeds regulatory and rating agency requirements and protects the company to the 185-year return period, reduces retention to $5 million, and includes all perils coverage and multi-year and third event protection.

“We are tremendously happy to have placed an oversubscribed reinsurance program, especially during a difficult market cycle,” Lucas said in a statement.

Slide had more exposure to cover this year, after it was allowed in January to take on more than 90,000 policies from now-insolvent United Property & Casualty Insurance Co., along with $272 million in premium.


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Additional pressure in worker shortages is coming from other white-collar industries, which find they are all competing for the same workers when it comes to people with advanced technological skills. (Photo: 1st Footage/AdobeStock)

Insurers attempting to hold the line on premium increases are staring down a number of industry trends conspiring to undermine that resolve, according to a number of industry execs.

Supply chain woes, worker shortages, already high premiums for electric vehicles and a growing incidence of unsafe driving are all exerting pressure on the industry to raise premiums.

Observes Nathan Houdek, insurance commissioner, Wisconsin Office of the Commissioner of Insurance: “Insurance reflects the underlying cost of covered service… So supply chain issues can impact rates across multiple lines of business as insurers adjust their rates to correlate to the risk of loss…If an automobile repair shop is having to wait longer for a part and that results in a person having to use a rental car for more days, then those delays can have a cost impact.”

Here is an up-close look at the trends pressuring premiums:

Supply chain woes linger

While the nightly death tolls on the TV news chronicling the pandemic have gratefully faded into the past, the supply chain slowdown triggered by the coronavirus still looms large.

Insurance industry execs say car repair shops are still having major problems securing replacement parts for vehicles — months after the apparent victory over COVID. Even when auto repairers can snare the parts, they often find those parts are significantly more expensive.

Observes Chance McElhaney, communications director, Iowa Insurance Division, “We’ve received some complaints from consumers voicing concerns about their auto repair claims taking longer to complete than appropriate…Our investigations have confirmed in these situations, supply chain issues have been responsible for the auto parts not being available.”

Adds Troy Downing, state auditor, Montana commissioner of securities and insurance, “In many cases, repairs are not starting for up to three-to-four months due to supply chain issues.”

Christopher Bernish, VP, head of operations and IT, protective asset protection, agrees. “We have certainly seen repair timelines impacted.”

Meanwhile, auto repair shops — like virtually all industries — are finding it tough to find enough workers to fill jobs, which is adding to repair delays. The repairs miasma is further compounded by the fact that there are fewer new cars on the market; yet another symptom of the global supply chain slowdown.

That leaves more consumers hanging onto their older cars longer, putting even more pressure on repair shops to scramble for parts when they show up for a makeover.

Equally worrisome: Longer waits for repairs are also forcing consumers to drive replacement rental cars longer than usual. That particular challenge has created a separate headache for insurers, who must choose between footing the bill for more days on rental cars than normally anticipated or leaving customers in the lurch without a rental car — and perhaps alienating them for life.

Katha Treanor, communications manager, Virginia State Corporation Commission, says many insurers in her state are picking up the costs for additional days on rental cars.

“We have noted insurers are paying for additional rental days — especially on third-party liability claims,” she says.

However, Jeff Rude, insurance commissioner, Western Zone Wyoming Insurance Department, says in his state, consumers are not as lucky. He shares that consumers are the ones stuck with the bill when the official rental car cost reimbursement agreement in their insurance policy hits the limit.

Yet another challenge: The increased costs for car parts, car repairs and replacement rental cars are also driving up the overall cost of salvaging a car after a major accident. The result is more cars suffering major damage are simply being written off by insurers as a total loss in light of those inflated charges — often to the consternation of consumers.

Worker shortages add to industry woes

Meanwhile, insurers have found that the worker shortage plaguing so many industries has shown up in their sector.

Observes Mike Causey, commissioner of insurance, North Carolina Department of Insurance:  “Many insurance companies have done away with their adjusters and are depending on outside adjusters.”

The dearth of workers was triggered in part by the ‘great resignation’ of workers, which is being experienced across virtually all industries. In addition, a significant percentage of older workers looking at future unknown risks associated with the coronavirus are simply checking out early from work life rather than risk their health in uncertain times.

Additional pressure in worker shortages is coming from other white-collar industries, which find they are all competing for the same workers when it comes to people with advanced technological skills.

Observes Wisconsin’s Houdek, “In the financial services space, (insurers) face aggressive competition to recruit and retain qualified and talented staff…As the use of technology has increased, insurers are also competing with the tech sector to find experienced developers, computer scientists and experts in AI.”

The upshot these stressors are exerting on the day-to-day operations of insurers: Fewer workers on hand means it sometimes takes longer than usual to process claims.

Additionally, the exodus of older workers is leaving some insurers with an experience and perspective gap. In some cases, there are fewer ‘old hands’ on board at some insurers to help guide new recruits through tricky or unusual claims.

Montana’s Downing adds, “There has been a shift in the experience and knowledge levels of adjusters due to skilled claims professionals retiring or leaving the workforce.”

Janet Ruiz, CPCU, AIM, director, strategic communications, Insurance Information Institute, believes that despite challenges, the industry has been able to respond to the worker shortage with a combination of technology and aggressive hiring.

“Insurers have increased their use of technology to streamline the claims process,” and help lighten staffer workload, Ruiz says. “Insurtech continues to provide cutting-edge solutions to the claims process and improved customer experience throughout.”

Despite competition from other white-collar industries, insurers have found ways to bring more tech-savvy workers on board, according to Ruiz.

Those workers have broader skills and education and are “able to integrate the use of digital platforms, artificial intelligence, workflow process, project management, etc. into the insurance claims process,” Ruiz says.

Wyoming’s Rude is another big believer in using technology to solve the worker shortage problem. Specific tech moves Rude believes hold the most promise for the industry are wider adoption of apps that monitor driving behavior, increased use of drones that assess damage and overall increased use of software in underwriting.

Electric vehicles: More environmentally friendly, but at a cost

Meanwhile, insurers are also finding that electric vehicles are putting upward pressure on premiums, given that as a vehicle genre, EVs are much more costly to insure and repair than their traditional counterparts.

For example, EVs tend to throw nearly twice as many fault codes as gas-guzzlers due to their heavier reliance on their electrical system and related components.

Since systems in an EV are much more tightly interdependent than in traditional vehicles, an EV experiencing a collision may often have more systems simultaneously impacted by that accident than a traditional car.

Case in point: Many EV owners in Florida saw some especially heavy losses after hurricanes there during the 2022 season wreaked havoc on their vehicles’ electrical systems.

Observes Montana’s Downing: “CSI’s Insurance Consumer Services division reports that hourly body shop rates are approximately 50% higher for electric cars due to the manufacturer’s required standards and access to certified technicians. When it comes to electronics in general as it relates to even traditional vehicles, additional wiring is added to the body of the vehicle — for example under the carpets, in doors, etc., as vehicles become ‘smarter’…When these vehicles experience significant water damage, they are also often totaled due to the risk of fire associated with wiring.”

III’s Ruiz believes EV manufacturers need to take the lead in bringing down the relatively high costs of repair for their vehicles.

North Carolina’s Causey has a different perspective: “My opinion is the local, state and national leaders need to move away from forcing electric vehicles on the public. If people want to buy electric vehicles that should be their choice. We could become an energy-independent nation if they would dig for more oil…The cost for an electric bus is three or four times that of a regular vehicle because of the high cost of batteries. I favor gas-powered vehicles over electric vehicles. We simply don’t have the infrastructure to support electric vehicles at the time.”

Drivers not as careful

As if these uncontrollable market forces are not enough for insurers to deal with in their drive to keep down premiums, another new pressure point — an increasing number of drivers who are simply not as careful as they used to be — could be easily solved if some people were simply more responsible.

Spikes in unsafe driving are up across-the-board, according to North Carolina’s Causey.

Drivers are speeding more than has been typical in recent years and they’re driving under the influence more, despite decades of campaigns by groups like Mothers Against Drunk Driving.

Even worse, more drivers are getting on the road without wearing seatbelts and are also driving in greater numbers while distracted — with smartphones and texting as the primary culprits.

Joe Dysart ( is an internet speaker and business consultant based in Manhattan.


The limits of ‘self-driving’ vehicles

Top 10 risks for P&C insurers in 2023

By William Rabb 

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.

With the June 1 reinsurance renewals a week away, the outlook for Florida-based property insurers may not be quite as dire as many had predicted earlier this year, at least according to a top official with one of the world’s largest reinsurance brokers.

“So far, what we’re seeing is a much more orderly renewal process than what we saw in 2022,” Rhandahl Fuller, managing director and Florida practice lead for Guy Carpenter & Co. He spoke this week at an online Florida market briefing hosted by the AM Best financial rating firm.

While some in the industry have warned that reinsurance renewal costs could rise another 40% next month, along with tightened availability, Fuller suggested the feeling now is more of “cautious optimism.”

“We saw a bit more overall appetite as some of the reinsurers that had stepped back last year either reentered or they increased their participations this year,” he said.

And one big reason for the measured sanguinity is that recent Florida legislative reforms, which have limited assignments of benefits and one-way attorney fees, already appear to be having an impact on many carriers’ long-suffering bottom lines.

Claims litigation and defense containment costs in Florida rose steadily from 2014 to 2018, dipped a bit in 2019, then rose again, explained Chris Draghi, AM Best’s associate director, who has studied the Florida market. Since 2013, defense costs have increased more than six-fold and since 2018, Florida insurers have spent $2.6 billion in that category for homeowners, allied lines and fire insurance claims, what Draghi called “a material amount.”

Looked at another way, the direct defense and cost-containment expenses for Florida carriers were about 8% of direct premiums earned in 2022, compared to 2% for most other states. The next-closest state was Louisiana, with about a 4% cost number.

But since late 2022, those defense costs have started to drop in the Sunshine State, after May and December legislative changes, the AM Best-compiled data show.

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“We really started to see the impact pretty quickly,” Fuller said. “We’re already starting to see companies observing pretty significant decreases in reported claims and frequency of AOB, and frequency of litigation. So a lot of that stuff is kind of happening behind the scenes and not all of it’s going to be reflected in operating results right away.”

Combined ratio for Florida carriers, excluding major national companies and Citizens Property Insurance Corp., also has dropped since 2020, after rising steadily for six years, Draghi pointed out. In 2014, those carriers enjoyed a luxurious combined ratio in the high 70s. But by 2020, that had almost doubled before sliding back slightly. For many insurers, though, the bellwether measure of profit is still well above 100, he noted.

Direct-loss ratios also are improving, Fuller said. For the first quarter of this year, the Florida domestic industry saw the ratio drop 5 points from the same time in 2022. The average ratio is now 15 points lower than the five-year average for Q1 – “pretty meaningful movement there,” Fuller said.

“We saw that more than 75% of the companies were reporting improvements year-on-year on that direct-loss ratio,” he noted. “So that’s really, really encouraging.”

But the Florida market is not out of the woods yet, Fuller and Draghi said. Capital contributions since 2018 for those Florida carriers, excluding Citizens and major nationals, have increased significantly, totaling $1.8 billion. But in that time, surplus amounts have risen just $158 million, or about 7.6%, Draghi’s data show.

“So what this indicates is that there has been a substantial amount of capital that has been flowed into these primary insurance carriers that is almost needed in order to keep them afloat,” he said. “And you have to wonder how long that can continue, if there’s any concerns in that kind of dynamic.”

Top photo: AM Best’s Jeff Mango, left, and Guy Carpenter’s Randy Fuller, in the webinar.


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By William Rabb |

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A granular look at the most expensive hurricane in Florida’s history, written by respected catastrophe-modeling firm Karen Clark & Co., highlights building practices that had a major impact on the scale of insured losses:

  • Contrary to what may seem like common sense, low-sloped and flat roofs fared much worse than more steeply pitched roofs. With low roofs, the air pressure above decreases compared to the pressure below, creating suction that ripped a number of roofs completely off of buildings when Hurricane Ian hit southwest Florida in September 2022, the report found.
  • But even flat and low roofs that were made of metal, reinforced concrete or built-up wood-deck systems sustained less damage than other types of roofs. “These built-up roof systems perform better because the multiple layers add redundancy,” KCC’s engineers and data analysts found.
  • Exterior insulation finishing systems, a popular siding material for commercial buildings and multifamily residential structures, proved to be especially vulnerable even in lower-than-peak winds during Ian. The sheets of insulation boards are lightweight and can detach easily. “Wind can exploit small cracks and cause significant siding damage, which can then lead to extensive interior damage due to water infiltration,” the report said.
  • Soffits on site-built homes also were damaged in and around the hard-hit Fort Myers area, but the damage is usually visible only from below and not from aerial surveys. Soffit damage can happen when high winds pull the fascia board off the edge of the roofline and exposes the soffit, the underside of the eaves or roof overhang. And soffits on corners of homes are especially vulnerable to wind that’s directed upward by exterior walls. “Soffit damage can necessitate complete replacement of a building’s siding because wind-driven rain gets under the siding and into the walls. Rainwater can also be driven over the exterior wall into wall breaches and attic spaces. Water infiltration can then lead to significant interior damage, increasing the ultimate loss,” the report noted.
  • Garage doors were a common failure point in the areas that saw only Category 3 winds during the storm. The winds can cause the doors to bulge and buckle, increasing wind pressure on the overall structure of the property and raising the chance that the roof and walls will fail.

Karen Clark, whose engineers and scientists surveyed Ian damage shortly after the storm, then again in March, found that newer homes and buildings survived Ian in much better shape than older structures. Other studies have said that’s due to newer building codes and construction techniques. Older, low-rise structures, especially those made of wood frame or masonry, suffered severe damage, while concrete and steel buildings saw less of an impact from wind and water.

Many older homes that were elevated were not elevated enough to overcome Ian’s storm surge, which reached 12 feet at Fort Myers Beach. About 20% of the buildings on that beach were total losses and the majority of those were not elevated. Those structures that sustained severe damage or total losses saw the failure of foundation connections or the failure of the foundations themselves, the report found.

KCC photo showing how flat roofs at multifamily complexes were lost in the storm.

“Anchor bolts create a much stronger connection than clips or nails because anchor bolts are often cast in place and connect to a concrete surface, which creates a higher load capacity,” the analysts noted. The report included many photographs of damage, including one home that had shifted completely off its foundation, while others were wiped away altogether by the surge.

“Because coastal areas experience a combination of the highest wind speeds and storm surge inundation, it can be challenging to separate the cause of loss, but assigning the damage to the correct sub-peril is necessary to assess the insured loss,” KCC wrote. “Wind-related damage typically initiates at the roof and progresses downward, while coastal flood damage initiates at the ground and progresses to other parts of the building.”

Overall, Hurricane Ian, with winds as high as 160 miles per hour as it made landfall, caused more than $100 billion in economic damage. One number in the report shows just how destructive Ian was in Florida: Total privately insured losses from all 2022 storm events in the U.S. are expected to be about $64 billion. Almost $63 billion of that was from Ian, and most of that was in Florida. The Florida loss estimate assumes a large number of litigated claims, typical for recent storms in Florida’s litigious atmosphere, before some of the 2022 and 2023 legislative litigation reforms were enacted.

Forecasts on the impact of future hurricane seasons do not look rosier. A hurricane needs three main ingredients to rapidly intensify, as Ian did twice as it churned across the Caribbean and the Gulf of Mexico: low vertical wind shear; high ocean heat content, and high sea surface temperatures.

Climate change is driving an increase in surface temperatures and rapid intensification of storms is likely to become even more frequent, the report predicted.

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U.S. meteorologists last week reported that the weather phenomenon known as “El Nino” will likely form off the west coast of South America. Historically, El Nino patterns have been linked to a lower-than-average number of hurricanes in the Atlantic basin. The U.S. National Oceanic and Atmospheric Administration will post its outlook for the 2023 Atlantic hurricane season on Thursday, May 25. Researchers at two universities have predicted six to eight hurricanes for the season, which begins June 1. That’s slightly fewer than what last year saw.

But as Karen Clark and other reports have noted, it takes just one rapidly-intensifying storm to produce record losses.

The firm was founded in 1987 by Karen Clark and Vivek Basrur, producing one of the country’s first catastrophe modeling companies, the firm has said. Clark was awarded the Nobel Prize in 2007 for her contributions to work of the Intergovernmental Panel on Climate Change. The full report on the 2022 Atlantic hurricane season can be found here.


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WRITTEN BYWilliam Rabb

Rabb is Southeast Editor for Insurance Journal. He is a long-time newspaper man in the Deep South; also covered workers’ comp insurance issues for a trade publication for a few years.


Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.

Just as the plaintiffs’ law firm of Morgan & Morgan warned, the number of Florida lawsuits filed across the state has shattered previous records, topping 280,122 in April, the Florida Bar reported.

That’s more than double the previous record set in May 2021 and is largely due to anticipation of the Legislature’s passage of a far-reaching tort reform bill that Gov. Ron DeSantis signed into law March 24, the Bar noted.

As it became clear that House Bill 837 was about to pass in March, limiting one-way attorney fees and multipliers in almost all insurance and injury litigation, and slashing damages if the plaintiff is found to be 50% at fault, Morgan & Morgan and other claimants’ firms told insurance defense attorneys that they were getting ready to file tens of thousands of lawsuits in the days before the law took effect upon the governor’s signature.

The firms were not exaggerating. And insurers and county clerks of court are now dealing with the impact.

“Our primary concern is having adequate resources to process the high volume of cases and appropriately serve all parties and the judiciary,” Martin County Clerk of Courts Carolyn Timman told the Bar.

Sarasota County Clerk Karen Rushing said the flood of new cases began around March 17, Rushing told the Bar’s news site.

The total number of documents in the case filings was almost 3.6 million in March, a third more than the previous month. About 44% of the new cases were filed in Miami-Dade County and in Hillsborough County, home to Tampa.

Some clerks have said they already are facing budget shortfalls, spiraling costs and understaffed offices – even before the tort wave hit, the Bar noted.

The Florida Department of Financial Services, which must be included on notices of intent to litigate against insurers, also reported a spike in planned litigation. The agency in March recorded 8,637 notices of intent to initiate litigation, up from 7,634 in February. That’s double the number of notices filed in March 2022, the DFS web page shows.

John Morgan (AP)

In previous eras, many of the insurance claims behind the lawsuits would have been dropped or settled without litigation, Florida Justice Association Secretary Todd Michaels told the Tallahassee Democrat news site. But with the law taking effect immediately in late March, firms felt compelled to file the suits to avoid the law’s fee limitations and protect their clients, Michaels said.

“At this moment we are doing what all lawyers should be doing – protecting the interests of our clients,” John Morgan, head of the Orlando-based plaintiffs firm, said in a statement in March.

The tort-reform law clamped the attorney fee and other restrictions on suits filed after March 24. It does not apply retroactively in most cases, although some insurer lawyers have indicated they may challenge that in some circumstances.

By Jahna Jacobson 

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Drivers are kicking the tires and trading up for new auto insurance policies.

In the first quarter, new policy growth rate was up 17% over the same period in 2022, and a record-breaking shopping growth rate was up 10.2% compared to 2.8% in Q4 2022.

The new LexisNexis® Insurance Demand Meter report examines auto insurance trends and demographics. Overall, the report finds new policy shopping and sales have the pedal to the metal.

Who’s changing lanes?

Higher premiums are driving even historically staid older drivers to shop and switch. The 66+ age category led all age groups in Q1 with 27% growth, with 36–45-year-olds, 46–55-year-olds and 56–65-year-olds tied at 21%.

The 36-45-year-old age group accounted for the most substantial growth early in the quarter. However, that reversed to more traditional patterns in mid-February as older shoppers outpaced younger shoppers.

These figures could signal to insurers that the older market is a ripe target for marketing.

New purchases, new policies

New policy purchases typically peak at the end of the first quarter in tandem with increased car purchases spurred by tax refunds. March’s new policy numbers were highest in 2021, stemming from vehicle purchases made with the final round of Coronavirus Aid, Relief, and Economic Security (CARES) Act stimulus checks. However, 2023 numbers are close behind.

Vehicle sales were down slightly in the first quarter of 2023 (-0.2%), weighted by a drop in used vehicle purchases (-0.4%) compared to 2022. About one in four new policy purchases is associated with a used vehicle purchase.

However, new vehicle purchases increased slightly (0.4%) for the same timeframe. Policy shopping tied to vehicle sales has held steady at around 27% for new vehicles and 36% for used. Still, the downtick in overall vehicle sales has caused a drop in the shopping attributed to vehicle purchases.

Auto agent impacts

In January, the exclusive and independent agent (IA) distribution channels saw 12% growth, with the IA channel growing by 11% in February and 9% in March. The exclusive channel slowed to 5% growth by the end of the quarter.

In the direct channel, January growth was modest but rose to 17% by the end of March.

The road ahead

The second half of 2023 could see a slowdown in shopping growth trends rooted in changing economic conditions impacting vehicle sales.

From the drivers’ side, total vehicle miles traveled has stabilized over the past several quarters, and claim frequencies have consequently remained flat. Claim severities continue to rise, but more slowly. Until they level off, carriers will likely continue to take rate.


By William Rabb 

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.

When HCI Group’s TypTap Insurance launched in 2016, it created a buzz in the industry and some skepticism, due to the company’s plan to rely heavily on mapping technology and property data. This month, Tampa-based HCI announced that, after a few years of steady growth but a pause in writing new Florida policies, TypTap had turned its first profit – at least by generally accepted accounting principles.

The company’s before-tax net income for the first quarter of this year was almost $1.2 million, compared with a loss of $3.3 million for Q1 2022, according to a recent filing with the U.S. Securities and Exchange Commission. TypTap has about 50,000 policies in force in the state, a few thousand less than last year at this time. The company now holds about 100,000 policies across 13 states.

Insurance Journal sat down with TypTap President Kevin Mitchell for an update on the company’s financial position, when it may return to selling new coverage in Florida, the cost of reinsurance, and what the secret sauce has been in the company’s recent profitability. He declined to talk about HCI’s new Florida property insurance startup, Tailrow Insurance Co. Mitchell’s comments, below, have been lightly edited for brevity and clarity.

Talk about the Q1 results.

In past earnings calls, our CEO mentioned having periods of profitability, which became months and months became quarters. It’s a good example of a balance between technology and insurance.

When you look back many years ago and what the promise of insurtech was, the promise was pretty simple: leveraging technology to drive a better underwriting result. And I think it’s been an interesting pivot in the overall market, where now, profitability is key. I think two years ago there were a lot of companies that just focused on growth. Growth is great, but you ultimately have to be profitable, especially in a world where cost of capital has increased.

In the May 9 earnings call, HCI’s officers mentioned that TypTap and Homeowners Choice Insurance had seen lower policy acquisition expenses, due in part to lower commissions paid. Does that mean you pay lower commissions to agents?


Not really. We’ve grown a fair amount and what we’d done, historically, is we paid an enhanced commission for new business and upon renewal it would adjust to a renewal commission. On top of that, we have made a decision to reduce commissions in Florida, so the combination of growing a fair amount and the business renewing and being adjusted, that will drive the policy acquisition costs lower.

Our commentary to the agent is, in an environment where the cost of everything is going up, reinsurance costs are going up, rates are going up, we try to optimize the business and make an adjustment to commissions. But they’re not at a revenue disadvantage.

In Florida, we pay a renewal commission of 8%. Some people pay 7%. Florida has gone through a transition, obviously. With rates going up, a lot of carriers have adjusted their commissions down to reflect the higher rates. Insurance companies across Florida had to make the difficult decision to make rate adjustments, and with those adjustments, because of the increased costs of claims, reinsurance and inflation, they made the difficult decision to make a reduction in the renewal commission.

But our goal is to make sure the amount of commission dollars that go to the agents is not less.

How have you grown and profited in recent months?

In the earnings call, for HCI group, our gross loss ratio was 33.6%, down from 40.6% in fourth quarter. That’s a pretty big move. Why? It’s a combination of a number of things. One, it’s rate action we took, along with additional underwriting decisions, and also the legislative reforms that the Legislature and the governor took bold action on.

Those reforms are already having an impact?

Yes. It does have an impact. But it’s a combination of our efforts and their guidance.

You paused writing new business in Florida last year. Where will you be a year from now? Will you grow in Florida again?

If I only had that crystal ball. Right now, in Florida, for homeowners, we’re on pause. We’re in the final stages of negotiation for reinsurance. Once we understand where that lands – it’s our largest cost – and we see how active or inactive the hurricane season is then we’ll make a decision on what we want to do, potentially in the back half of the year.

There was some talk early this year about how the Florida Legislature needed to take a final step and provide another layer of more affordable, state-backed reinsurance. That didn’t happen. Would that have helped?

I can only speak on behalf of ourselves. We talked about this in the earnings call. We had the benefit of starting the negotiations on reinsurance with 70% of our program already being placed, between Homeowners Choice and TypTap. So, how did we get to that 70%? That’s through the Cat fund, we elect both companies, at 90% election; and there’s the RAP layer (a Florida-backed reinsurance program created in 2022) for both companies. We didn’t take it last year because we had plenty of capacity from the private markets. We have to elect it this year.

So, we are in the process of negotiating that last 30% in the private market.

And that’s not going to break the bank?

You have to look at it in a couple of ways. The Florida Cat fund prices haven’t moved a lot. The RAP layer is free, but you have to do a rate filing and take a rate reduction for that. And a multi-year deal was set last year. So it’s only 30% on the private market. We have had strong trading relationships with these reinsurers for last 15 years. I feel we’ll come to a fair middle ground based on the increased cost of capital.

We keep hearing there will be another 40% increase in reinsurance costs with the June 1 renewals.

It’s a very interesting thing when you start to talk about increases with reinsurance. Because it’s 40% of what? Is it 40% risk-adjusted, on the overall risk? Is it a 40% increase from what you paid last year? Companies have grown, companies have shrunk. I think everything depends on so many different factors. The best way to look at it is percentage of gross written premium. You write “X” amount of premium, and how much reinsurance do you have to buy for that premium?

TypTap last year had planned an initial public offering, then backed off, raising some questions about the company’s viability. Will that IPO happen?

Well, it’s something we monitor closely. It’s important to look at the overall market right now. There’s not a lot of companies going public. What TypTap focuses on day in and day out is making sure that we’re ready when that window opens back up. So our focus in 2023 is really to optimize the business and drive profitability.

For the 50,000 policies you have in Florida, did you have many claims from Hurricane Ian?

Sure we did. I don’t know if we disclose this, but yes, we had claims. Homeowners Choice and TypTap had policyholders in southwest Florida that saw the brunt of the impact. What we’ve said is that we’re very comfortable with the reinsurance we’ve purchased and are working diligently to wrap up the last bit of open claims we have for Ian.

Were the recent legislative insurance and tort reform changes enough, or will they have to come back next year and tweak some things?

We view those reforms as historic. We applaud the Legislature and the (Florida) CFO and the governor for taking that bold step. I think the important thing when you sit back and reflect on those reforms is it really went to the core of the problem in trying to eliminate fraudulent claims. It was a pretty bold step. Senate Bill 2D in May and Senate Bill 2A in December. There were three main parts of that bill: Ending AOBs, ending one-way attorney fees, and reducing the time to file a claim. That combination will go a long way to stabilize the Florida insurance market.

Altering independent adjusters’ estimates. That’s something that has been in the news quite a bit this year. Is that something TypTap ever does?

We don’t alter adjustments. We try to be transparent. We run an in-source model and have our own claims department. So we have a fair amount of oversight. We’re here to pay claims fairly. You have to give the insurance company benefit of the doubt.

Some in the industry may be looking at what you guys are doing and how you’re making a profit now in a still-turbulent market. Do you want to talk about what the secret sauce is?

I don’t know about the secret sauce. I think that there are a number of things that drive the success of HCI Group. One of the main items is we have a working management team. People are here every day, rolling up their sleeves and are very much in the weeds of the business. We’ve made a series of investments in technology and people that we feel are starting to pay off.

One of the pieces on the technology side, we have technology that allows us to underwrite down to the rooftop level. Not many people have that technology. It’s built internally through Exzeo and we have 150 employees in our technology group: data scientists and developers that have been there since 2012, developing a full-stack technology platform that drives a better underwriting result. Now we’re starting to see the true benefits of that.

Down to the rooftop level?

What I mean is, the technology geo-codes to the rooftop, not just the parcel. And then we collect data on that home: what year it was built; f it’s one-story, two-story, nearness to a fire station; if it’s frame or masonry, if the roof is shingle, tile, metal, the shape of roof, the square footage, replacement costs, if the home has a pool and a pool cage. All of these data points ultimately factor into how we price the risk. And we make sure we price the risk appropriately, so when we do have a loss, we want to make sure we’re charging the appropriate premium for the risk we’re taking.

What will it take to start selling new policies in Florida again?

HCI Group has a commitment to Florida. It’s been operating in Florida for the last 15 years. TypTap has been operating in the state since 2016. We’re trying to balance a couple of different things. We have to make sure we can secure reinsurance at a price that we can run a business profitably. We’re very conscious of the hurricane season, and we have to make sure we have ample capital.

It’s important to grow and write new business, but we also have a commitment to the policyholders we currently have. And I think our job, first and foremost, is to make sure we’re making the appropriate decisions for our current policyholders before we take on new ones.

I think there’s going to be an opportunity to grow in the back half of 2023. We just want to temper everyone’s expectations in case there’s some sort of change in the market that doesn’t allow us to follow through with that opportunity.

By Chad Hemenway 

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.

Commercial Property Premiums Up Over 20% to Start 2023: CIAB

By Chad Hemenway | May 18, 2023

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Commercial property premiums increased more in the first quarter than they have in more than 20 years as the first three months of the year marked the 22nd straight quarter of overall premium increases, at 8.8%, according to the newest survey from The Council of Insurance Agents & Brokers.

Changing roles with cyber as the insurance market’s typical “outlier” to recent premium-increase moderation, commercial property premiums spiked 20.4% in Q1 – the first time since 2001 that commercial property recorded an increase of over 20%, according to Q1 Commercial Property/Casualty Market Index respondents, one of which said the property market hardened quicker than anyone can remember.

Inflation and natural catastrophe risk were the main drivers of the Q1 premium increase in commercial property. Loss-of-use is being negatively affected by supply chain issues, increasing repair costs.

Source: CIAB

Related: Hard Commercial Property Market to Linger as Property Owners Take On More Risk

More than 60% of respondents also reported an increase in the frequency of commercial property claims from weather events.

Brokers taking the survey said insurers pushed for updates to replacement values and recent improvements, with tightening in catastrophe exposed property. Eighty-five percent said they saw a reduction in capacity for property, with nearly half describing the reduction as “significant.”

Meanwhile, cyber premiums during Q1 went up 8.4% as opposed to increases north of 20% a year ago and 15% last quarter. CIAB said about a third of respondents said there was also an increase in capacity for cyber, “suggesting carrier attitudes towards underwriting the line may have started to shift.”

Related: Clients Buy Higher Limits as Q1 Cyber Increases Follow Moderation Trend: Marsh

CIAB said it “seems like that focus on incentivizing insureds to adopt a more aggressive cyber risk management strategy has had some success. In Q1 2022, the number of respondents reporting a rise in cyber claims was 72%. By this quarter, that number had fallen to just 39%.”


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WRITTEN BYChad Hemenway

Chad is National News Editor at Insurance Journal. He has been covering the insurance industry since 2007, reporting on trends and coverage in most lines of insurance as well as natural catastrophes, modeling, regulation, legislation, and litigation. Chad can be reached at