Published by Newsweek | February 23, 2025
Insurance has been a major issue in the Sunshine State in recent years, as hurricanes and storms have had a devastating impact.
As Florida homeowners recover from years of skyrocketing insurance premiums and coverage cuts, a new study report obtained by the Miami Herald and Tampa Bay Times revealed on Saturday that Florida insurers sent billions to affiliates while claiming to be losing money in the wake of hurricanes.
This comes as several major insurers cut coverage across Florida or withdrew from the state entirely in the past few years, citing increasing costs and growing catastrophe exposure. A combination of excessive litigation, widespread claim fraud and the growing risk of more frequent and severe natural disasters contributed to create a perfect storm that plunged the state’s property insurance sector into a crisis.
According to a 2022 study report, that has never been made public and was released to the Miami Herald and Tampa Bay Times after a two-year public records request, revealed that Florida’s homeowners insurance market companies claimed financial ruin following Hurricanes Irma and Michael.
However, the report suggests those hardships were overstated as their parent companies and affiliates were raking in billions. Between 2017 and 2019, as the state’s insurance market began unraveling in the wake of the back-to-back hurricanes, insurers justified steep rate hikes by citing mounting losses due to the storms.
The report reveals how insurers paid out $680 million in dividends to shareholders while simultaneously funneling billions to affiliated companies.
The report also showed between 2017 and 2019, the insurers in the study showed a net loss of $432 million and their affiliate companies showed a net income of $1.8 billion. With all 53 companies included, the industry recorded $61 million in net income, and affiliates made about $14 billion in net income.
According to the study’s author, Jan Moenck, executives with most Florida-based insurers were removing so much money from their companies that they violated state regulations and as a result left some insurers financially weak to pay out claims.
Despite these findings, the report never reached state lawmakers, according to the Herald. The Office of Insurance Regulation said in a statement that the study was not given to lawmakers because it was “not a formal examination report.”
“Our office does not release every internal analysis of companies to the Legislature,” the office said, per the Herald.
Since the study’s release, there has been no follow-up investigation, despite Moenck’s recommendation for continued oversight. However, according to the Herald, state regulators say the insurance market is different in recent years, noting Florida’s Insurance Commissioner Mike Yaworsky’s push for more oversight.
