The Florida Office of Insurance Regulation said its catastrophe stress tests show that all 112 insurers of property in Florida could pay policyholder claims arising from a powerful one-in-100-year storm.
The state agency said all 112 insurers, including 67 based in Florida, have enough reinsurance, capital and surplus to pay claims for storm so strong it would be expected to occur in one year out of 100.
The results of the catastrophe stress tests
“should give consumers added piece of mind and confidence in Florida’s homeowner insurers,” William Stander, executive director of the Florida Property & Casualty Association, said in a prepared statements.
The stress test measured insurers’ hypothetical financial exposure in three historical disasters. These include the four-storm hurricane season in 2004 when hurricanes Charley, Frances, Ivan and Jeanne made landfall in Florida.
The other two storms used to measure financial stress on insurers were the Tampa hurricane of 1921 with sustained winds of 140 miles per hour and a Category 4 that hit Fort Lauderdale in 1947 with sustained winds of 147 miles per hour.
This is the third year that the Florida Department of Insurance Regulation has applied stress tests to Florida property insurers.