Property insurers in the State of Florida are expected to benefit from a more pronounced softening of reinsurance pricing and rates at the June 1 2026 renewals, which may serve to sustain the positive market momentum being seen since the legislative reforms, AM Best has explained.Florida’s property insurance market was once deemed dysfunctional due to the proliferation of litigation and issues such as assignment of benefits (AOB), but legislative reforms enacted in recent years have meaningfully changed the picture and served to increase the appetite of reinsurance capital to support catastrophe exposed risks on the Peninsula.Despite that, alongside improving market conditions and underwriting results, Florida’s property insurers remain among the heaviest users of reinsurance capital, AM Best explained in a new report today.2024 had marked the first underwriting profit for Florida’s domestic property insurers in more than a decade.

2025 saw the positive momentum accelerate, with a $1 billion underwriting gain, well up on the $235 million in 2024 and the $132 million underwriting loss in 2023.“The improved Florida property insurance landscape reflects reduced litigation and claim solicitation, attracting new writers to the state while allowing existing writers to recover from losses in earlier years and take advantage of more refined pricing sophistication,” explained Lauren Magro, senior financial analyst, AM Best.“While 2024 marked the first year of an underwriting profit for the segment in over a decade, results in 2025 only further extended this trend and benefited from no named hurricanes making landfall.” Of course, a lack of named storm and hurricane activity hitting Florida in 2025 helped enormously, but still the results speak for themselves and are serving to boost the perception capital has of deploying in the state.

“Despite Florida carriers’ heavy reliance on reinsurance coverage as a risk transfer tool, market reinsurance costs are declining, and capacity is gradually widening as more capital is deployed in the post-reform environment,” AM Best explained.The mid-year 2025 reinsurance renewals saw modest rate reductions for Florida carriers and increased reinsurance and insurance-linked securities (ILS) market capital looking to deploy there.In 2026, after a softer market through the January and April renewals, the expectation now is that the June 1st 2026 reinsurance renewals will see an even softer result, positively for the reinsurance buying insurers operating in Florida.

Both cost reductions and increased risk appetite are being seen in the reinsurance market for exposures in Florida.This has been evident in the catastrophe bond market first, where a number of Florida exposed transactions have priced down relatively meaningfully year-on-year.AM Best said, “Looking ahead to the June 2026 renewals, a more pronounced reduction in reinsurance costs is expected as the market softens.

“Some carriers may benefit from double-digit price decreases for catastrophe reinsurance coverage, reflective of a lack of land-falling hurricane in 2025 and the continued success of tort reform.” Some of the declines in spreads seen on Florida exposed cat bonds have certainly been in the double-digits, although these are typically higher-layer reinsurance arrangements and we understand price decreases are less steep as you move down towards more working layers of the tower.“With profitability stabilizing and primary carriers’ balance sheets bolstered through sizable capital appreciation, along with stronger underwriting guidelines, some negotiating power shifting back toward primary carriers is likely,” Chris Draghi, director, AM Best explained.“However, prospective reinsurance market trends remain influenced by hurricane activity – a significant-sized hurricane event that passes through a major city in Florida could change market dynamics.” The reinsurance pendulum has undoubtedly swung back more in favour of the buyers of protection, than where it has hung the last few years.

The market is now more balanced, with a chance of delivering still attractive underwriting returns for reinsurers and ILS markets, but caution must now be the watchword to ensure the softening doesn’t further accelerate and that terms and conditions continue to favour a more equitable level of risk sharing when significant losses next arise (as they surely will)...All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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