Florida has made major strides since its property insurance crisis a few years ago, when some companies failed and others abandoned the state. Carriers have started turning profits again, new insurers are entering the market, and premiums have stabilized.
Climate change isn’t going away, but new insurers are testing the notion that they can manage the risks with better underwriting technology and legislative reforms. The forthcoming initial public offering from Slide Insurance Holdings Inc., which comes to market at the start of the Atlantic hurricane season, is perhaps the clearest test for that thesis.
In a sense, Slide emerged from the ashes of the crisis. It became one of Florida’s top players through the acquisition of portfolios from now-liquidated insurer St. Johns Insurance Company and Citizens Property Insurance Corporation, the state-backed insurer of last resort, which is trying to depopulate to reduce risk. Slide’s investment pitch seems to be twofold: that it has better underwriting technology than its peers; and that the legislative reforms of the past few years have reduced excess litigation toward insurance companies and, thus, dramatically improved the risk-reward of doing business in the state.
