Florida Peninsula Says Reforms Have Had an Impact, Announces 2% Rate Cut

After the Florida Legislature in 2022 and 2023 passed sweeping reforms designed to limit excessive claims litigation, some in the insurance industry predicted that the new rules would prevent further rate increases – but would not lead to actual decreases in premiums.

Boca Raton-based Florida Peninsula Insurance Co. begs to differ. The company recently filed for and was approved for an average 2% decrease in homeowners and condominium policies, for new business and renewals, starting in July.

“We saw a dramatic – I mean dramatic – reduction in litigation and in claims filed in the last year,” said Stacey Giulianti, chief legal officer for Florida Peninsula.

Before the legislation, which effectively ended one-way attorney fees and assignment-of-benefits agreements and aimed to curtail bad-faith claims against property insurers, Florida Peninsula and its sister company, Edison Insurance, were seeing as many as 400 lawsuits per month, Giulianti said Thursday.

Now, the numbers have fallen to less than 30 a month. Before, a large share of claims were filed by lawyers and public adjusters, he said. This year, claims have mostly come from property owners themselves.

At the same time, Florida Peninsula and Edison have grown significantly, from a total of about 150,000 policies in force to some 270,000.

Giulianti argued that the rate decrease could have been as much as 25% if it weren’t for the effects of inflation, higher building material costs and higher reinsurance costs.

Edison at this time has no plans to reduce rates, but has not asked for an increase. “And that’s something,” after several other insurers have sought double-digit increases, even after the reform bills were enacted, he said. That’s due partly to the fact Edison and Florida Peninsula in recent years asked for actuarily indicated rates and did not undercut their filings to soften the blow, Giulianti said.

It’s too soon to know if other insurers will follow suit on rate reductions. Officials with Universal Property & Casualty Insurance Co., ranked in the top three property insurers by policy numbers, early this year suggested that the carrier may reduce some premiums in coming months. But Florida Peninsula appears to be the first to actually take the plunge.

A 2% trim may be small comfort for homeowners and condominium owners, many of whom have seen significant premium hikes since 2020. But it could be a start.

“I want to see rates as low as we can get them, so that we can compete and beat the pants off the other guys,” Giulianti said.

Most of Florida Peninsula’s recent filing with the Florida Office of Insurance Regulation is marked “trade secret” and was not publicly available.

The rate news comes a week after the management behind Florida Peninsula and Edison announced the launch of Ovation Home Insurance Exchange, a Florida-domiciled reciprocal insurer. The company is expected to begin writing policies in June. Florida Insurance Commissioner Michael Yaworsky signed off on a consent order Mar 27. The consent order can be seen here.

Ovation is one of eight new insurers approved to enter the Florida market in the last 18 months or so, a clear sign that the once-distressed market continues to stabilize, Yaworsky said this month.