Common Able to Add Florida Insurance policies Once more, Contemplates Potential Charge Cuts

Common Insurance coverage Holdings, after discontinuing greater than 160,000 insurance policies over the past two years, now sounds prefer it’s prepared to begin rising once more in its house state of Florida.

“As we transfer ahead, we’re extra assured within the Florida market, which is our largest geography, and we now have began to slowly enhance new enterprise in extra territories,” stated Steve Donaghy, CEO of Common and its principal model, Common Property Insurance coverage Co., one among Florida’s largest carriers.

And, thanks partially to Florida litigation laws accepted within the final yr, Common officers hope to really see, look ahead to it … a possible lower in charges in a state that has witnessed monumental jumps in premiums for nearly all strains of enterprise.

“The laws has nonetheless not impacted our complete e book of enterprise, in order that flows by way of, we’re seeing numerous optimistic growth that I consider will likely be mirrored in future years, and we are able to take a look at potential charge reductions in Florida,” Donaghy stated.

Till now, many within the Florida insurance coverage market have shied away from the “lower” phrase on charges, regardless of the 2022 reform laws that aimed to restrict claims lawsuits, lawyer charges and bad-faith claims towards insurers. Some have predicted that Florida charges won’t ever drop, however will solely stabilize because of the brand new statutes.

Donaghy’s phrases got here Friday in an earnings name that expanded on the publicly traded firm’s third-quarter 2023 monetary assertion. The numbers proceed to enhance for the agency, with complete income up $73 million over Q3 2021, a interval that could possibly be thought of one of many lowest of the Florida property insurance coverage disaster. Direct premiums written even have grown, from $433 million in Q3 2021, to $532 million this yr.

Common Insurance coverage Holdings, based mostly in Fort Lauderdale, shouldn’t be but within the black however internet losses have continued to shrink, to simply $6 million within the third quarter this yr, a 98% enchancment from losses seen a yr in the past presently. And the mixed ratio has improved considerably, all the way down to 110.7%, a pointy decline from the 139.2% posted in Q3 of final yr.

Climate losses have been manageable, firm officers stated. The corporate is sticking with its early estimate of $1 billion in losses from 2022’s Hurricane Ian, “and we be ok with that,” Donaghy added. And Hurricane Idalia, which hit a part of Florida in late August of this yr, was much less extreme than anticipated, permitting Common to soak up the losses and keep inside it reinsurance retention limits.

Common’s claims adjusting agency, Alder Adjusting, generated a revenue of just about $19 million within the third quarter 2023, Common’s chief monetary officer, Frank Wilcox, stated within the earnings name.

“We proceed to boost our best-in-class claims infrastructure, which along with our reinsurance capabilities, serves to distinguish us from our friends,” Donaghy stated. “The third quarter benefitted from robust and bettering developments and I’m optimistic as I look ahead.”

Donaghy’s rosy narrative raised just a few questions within the Florida market Friday. A couple of insiders puzzled how Common may be so optimistic concerning the coming months, with Residents Property Insurance coverage Corp., the state-created insurer, persevering with to undercut the first market with it statutorily restricted charge will increase.

Common officers didn’t return emails and cellphone calls in search of additional info.

Common’s inventory worth on Friday closed at $14.10 per share, down barely from earlier within the day, and down from a excessive this yr of $19.79, seen in April, based on Yahoo! Finance.

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Florida