DALLAS – Property insurance reforms enacted in May in Florida could benefit property/casualty insurers and reinsurers in the wake of Hurricane Ian, although some believe the changes did not go far enough and state laws create unique challenges for the market.
After a disaster in Florida, “we’re seeing a tail of the loss that we’re not seeing in other states,” said Kerri Hamm, vice president, head of business development at Munich Re US
Ms. Hamm spoke during an interview at the American Property Insurance Association’s annual meeting in Dallas on Tuesday.
Issues such as allocation of benefits and the ability for homeowners to have significant time to report damage from hurricanes create a unique environment in Florida, Hamm said.
An assignment of benefits is an agreement that transfers the insurance rights or benefits of an insurance policy to a third party, such as a roofing or building contractor.
“These problems are accumulating to a tail that we don̵7;t necessarily see in other states,” Hamm said.
During a panel discussion Monday, Paul Anderson, managing director, U.S. real estate growth leader at Aon PLC, said there is hope that some of the recent Florida law changes and expected insurance reforms will be beneficial.
Changes regarding attorney representation and awarding of benefits should have a favorable impact on the market, Anderson said.
Property insurance reforms passed by the Florida Legislature on May 25 eliminate the award of attorneys’ fees in awarding benefits disputes and limit the awarding of fee multipliers in property insurance disputes.
Insurance companies need to be able to make money in quiet disaster years so that when a cat event occurs, they can pay claims on the coverage they provide, he said.
“We’ll see firsthand with Ian how some of these (legislative reforms) play out,” Anderson said.
Tort reform has worked in various jurisdictions in other industries, such as medical malpractice, says Will Garland, president, centers of excellence, Guy Carpenter & Co. LLC.
“There needs to be a balance so that tort reform can bring available capacity, which in turn will become affordable capacity to the wider market,” Garland said.
But, Hamm said from an insurance perspective, there is too much uncertainty. “I would like to see Florida go even further, to clean up the legislative legal system abuse issues that we see in that state,” she said.