Florida Chamber of Commerce Property Insurance Summit Report

The following report on the recent Florida Chamber of Commerce Property Insurance Summit is provided by the Property Casualty Insurers Association of America.

More information about the Florida Chamber’s “Business Coalition on Property Insurance” can be viewed by clicking here.

Should you have any comments or questions, please do not hesitate to contact this office.

 

Florida Chamber of Commerce Property Insurance Summit

Orlando, Florida–On Friday, February 1st the Florida Chamber of Commerce hosted their 2008 Property Insurance Summit in Orlando. The Chamber convened this workshop for the state’s business groups to discuss the current debate over the future of Florida’s insurance market.

The Florida Chamber of Commerce continues to be concerned with the lack of affordable commercial and residential property insurance from the private sector and the continued reliance on a government pool backed by policyholder assessments.  Rising hurricane insurance costs, increased reliance on deficit assessments, significant growth in the state-run insurer and lower than actuarially sound rates have all contributed to making hurricane insurance one of the greatest threats to employers across the state.

The Florida Chamber hosted a Property Insurance Forum on Friday, February 1, 2008 in Orlando to have all stakeholders work together and drive a solution to this complex problem.  The morning portion of the summit highlighted several presentations to provide an overview of the insurance market.  The afternoon session included a panel discussion in which a large cross-section of stakeholders was assembled to participate. Invitees included premium payers, business owners, realtors, banks and other lenders, residential and commercial builders and developers, commercial and residential insurance companies and insurance agents.  

At the summit, the Florida Chamber of Commerce announced that reforming the property insurance system will be one of their top priorities for the 2008 legislative session. Chamber President Mark Wilson urged the business community to support the insurance industry in finding market-based solutions. The Chamber has drafted a legislative proposal to reduce Citizens’ assessments on commercial property insurance. Senator Bennett has filed this language in SB 1422 (there is no House bill at this time).

Florida Insurance Council (FIC) President Guy Marvin presented on behalf of private insurers. Marvin used the same Insurance Information Institute (I.I.I.) powerpoint presentation from Dr. Bob Hartwig’s all-trades January media briefing on the realities of the Florida property insurance market.

Vice President and Director of Communications for the Institute for Business and Home Safety Kevin Barber discussed his organization’s agenda and their commitment to finding solutions for Florida’s market. IBHS’ presentation focused on the need for mitigation, retrofitting, and building code enforcement.

President and CEO of Aon Re Bryon Ehrhart reviewed the differences between the Florida CAT fund and private reinsurance. In addition, Ehrhart gave a brief history of how and why reinsurance rates have increased in recent years, a review of reinsurers’ volatility and returns as compared to the rest of the financial market, and the outlook for current and future reinsurance pricing.

A panel discussion was held to provide a variety of stakeholder perspectives and expectations. John Scott of Cushman & Wakefield, Jeff Grady of the Florida Association of Insurance Agents (FAIA), Ben Anderson of Anderson Auctions representing the Florida Association of Realtors (FAR), Scott Jenkins of the Florida Bankers Association (FBA), Dave Hart of the Florida Home Builders Association (FHBA), Gary Guzzo of Floridian Partners lobbying firm, and Allen McGlynn of State Farm participated.

FAIA reminded the group that Citizens assessments will be billed mid-term and warned that the current reforms are keeping private policies unfairly high in order to keep Citizens rates artificially low. Jeff Grady pointed out that it will be difficult to readdress the 2007 reforms from HB 1A because legislators will be apprehensive to challenge the Governor.

FAR expressed their concern that the availability of property insurance is becoming more challenging and that the reputation of the state is on the line. Realtors and other business owners are threatened with further reductions in investment in Florida due to the insurance conundrum. FAR has monitored the drop in doc stamp revenue, which has a correlation with the rising costs of insurance. Realtors have taken up mitigation as one of their top priorities. They will be talking to consumers about the need for mitigation and retrofitting through their agents.

FHBA advocated for the benefits of using a point scale for giving homes a hurricane rating. They would also like to discuss the possibility of rolling mitigation costs into mortgages.

State Farm discussed their successes in Mississippi in restoring the insurance market after Hurricane Katrina. State Farm joined with Governor Barbour to support the “Mississippi is open for business” campaign that refrained from using inflammatory language and had public policymakers and insurers working together to rebuild the state.

Following the panel discussion, the Chamber opened the floor to a group discussion. State Farm highlighted the successes from South Carolina’s deregulation of the auto insurance market that moved policies out of a residual market back into the private market.

Don Crane told the group about his concepts for restoring the market by creating a state-sponsored company that is better capitalized and not left with the exposure that the private market discards. It would underwrite all wind. His concept was featured in the November 2007 issues of Florida Trend.

The Florida Chamber plans to meet again before the Florida Session begins to discuss how they can achieve their legislative goals. PCI will continue to monitor their proposed bill for commercial carriers and will participate in Chamber events.
 

 

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