The Sunshine Economy: Florida's Insurance Industry And Hurricane Irma

Oct 23, 2017

In the six weeks since Hurricane Irma first made landfall in Florida, almost 750,000 property insurance claims have been filed. Almost one out of every three of those have been filed by property owners in South Florida. And most of those insurance claims remain open.

"So far, I am satisfied," said Florida Insurance Commissioner David Altmaier about the process. "We do have ways to go, so that's a preliminary assessment."

Irma is the biggest storm insurance event in Florida in more than a decade and is Altmaier's first major storm as the top insurance regulator in the state. 

First, the data in three visuals:  

Three Hurricanes in Two Years

Heat Map of Hurricane Irma Claims by County

A Focus on South Florida

WLRN's Tom Hudson talked to Florida's insurance commissioner about the state of the industry after Hurricane Irma. Here are some highlights of their conversation: 

WLRN: What are the metrics to measure the response of the insurance industry to Irma?

Altmaier: The first one is the financial capacity to respond to this event. The primary metric that we use to do that is a set of claims data that we receive. We have the ability to break that claims data down on a company-specific level so that we can then look at each company's financial condition. We can look at the claims volume that we expect that company to receive and make a determination about whether or not that's going to financially stress that particular insurance company.

Second is the way in which [companies are] interacting with their consumers. We stay in close communication with the Department of Financial Services. They are going to receive complaint information from consumers. We're going to monitor the types of complaints that are coming in and we're going to look for trends. 

Roughly a third of the claims have been closed about six weeks after the storm. Is that good performance by your estimation?

We had a high frequency of claims, but the total cost of those claims on an individual basis is somewhat lower than it might have originally been expected. What's going to really tell us whether or not there's an issue in terms of whether or not there's a delay in claims handling or the complaint information that we're receiving from the Department of Financial Services is if we see that the closed claim number doesn't move very much. 

Do you have company-specific data?

 We do.

Many companies originally labeled that data as a trade secret, meaning you can't publicly release that information.

 And that's something that's  a little bit different after Hurricane Irma than after Hurricane Matthew.

Hurricane Irma damage at the Coral Shores Estates neighborhood on Little Torch Key on Sept. 19, 2017.
Credit Tom Hudson / WLRN

  Do you think it's a trade secret?

It's a difficult question to answer from our perspective because we are able to see the information that they provide to us. We just aren't able to release it. It's not something that I've ever spent a lot of time thinking about.

Do you think that is important information for policyholders?

I think that it's certainly a good question that's worth exploring. That's something we intend to do once we've through the bulk of the after-Irma analysis.

Are there any property insurers that cover property in Florida that are in financial trouble because of claims from Hurricane Irma?

 No. We do have ways to go. And so  the numbers that are on our website right now are likely going to increase over the next several weeks as the claims process plays out.

Listener J. Garcia from Coconut Creek sent us this question: What are you going to do to make sure that insurance rates don't balloon out of control after this hurricane season?

 There's a lot that we're going to be monitoring as the rest of hurricane season plays out. In particular, some of the falling reinsurance rates. [Also] the impact of this event as well as the other catastrophic events that we've seen around the U.S. and North America over the past 60 to 90 days.

What we're going to do at the office is what we've  done historically -- make sure that the rates that consumers pay for their insurance products are reflective of their underlying risk and do everything that we can to keep out excessive costs, excessive expenses and make sure that's the rates are not unfairly discriminatory or excessive or inadequate.