This month Farmers Insurance announced that it will no longer write new property insurance policies in Florida, citing “catastrophe costs … at historically high levels.” AIG also recently stopped issuing policies along the Sunshine State’s hurricane-vulnerable coastline.
State Farm, meanwhile, said in May, that it would impose a moratorium on new policies in California due to “rapidly growing catastrophe exposure.”
Mark Friedlander, director of corporate communications at the Insurance Information Institute, said that dozens of firms have reduced their presence in Louisiana, including 50 that have stopped writing new policies in the state’s hurricane-prone parishes.
“The industry’s taking the approach now of what’s called predict and prevent, meaning being proactive to address climate risk and make sure insurance coverage reflects that and make sure homes and business take preventative action,” Friedlander told The Hill.
He noted that while Farmers made headlines, it’s the 15th insurer to stop writing new policies in Florida in the last 18 months. Although most of those companies have not pulled out of the state outright, he added, three have.
“Insurers are in many ways the first movers” in response to trends like extreme weather and natural disasters, said Benjamin Keys, an assistant professor of real estate at the University of Pennsylvania’s Wharton School.
“They have a significant amount of money at stake, so they’re very exposed to the downside,” he added.
Read more in a full report at TheHill.com.
