Homeowners Insurance In Florida Will Remain High

An executive of The Hartford told Florida lawmakers today that the group would need five or six more years of strong profits to recoup losses from 2004 and 2005 hurricane seasons.

Today is the second day of a sworn testimony by insurance executives in which a Florida Senate committee is seeking answers to why rates in the state have not dropped for many customers despite legislative action to lower rates.

Thomas Johnston, senior vice president for The Hartford Financial Services Group, stated that “Our homeowners book lost about $500 million,” “We made profits in 2006 and 2007, but we probably need five or six more years at that level of profit just to break even from those losses.”

“We may be able to find some middle ground now that they know better what their 2008 reinsurance costs may be, ” said Belinda Miller, deputy commissioner of the state’s Office of Insurance Regulation.

Many Florida insurance companies are dropping a number of policies to reduce its Florida exposure due to the massive losses they undertook during the 2004 and 2005 hurricanes. This withdrawal from Florida has come because many insurance companies have had rate increase requests turned down by the state in an attempt to keep rates low.

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