Adam Schwebach, broker and head of property for North America at Gallagher Re, the global reinsurance broker, last week sat down for an interview with Insuranc
e Journal. The discussion came on the heels of Gallagher Re’s annual Florida broker summit, which provided some fresh insights into the shape of the reinsurance m
arket and the continued impact of recent legislative reforms in the Sunshine State. The conversation has been lightly edited for clarity and brevity.
IJ: How was the Florida broker event this year?
AS: This was our 11th annual summit. This group consists of Florida carriers—we get a very good cross section of Florida-specific carriers—plus plenty of reinsu
rers. But also, other important stakeholders, including the Florida Office of Insurance Regulation, the Florida Cat Fund, Citizens (Property Insurance Corp.) are all there. It
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’s meant to set the stage leading into the 6/1 renewals, with topics that are important to the market.
With the litigation crisis that had plagued Florida for many, many years, we would get together in past years and there weren’t a lot of positives to talk about. If you look at the past couple of years, though, with the passage of the 2022
and 2023 (litigation reform) legislation, there’s been a market change in mood. I would say when that legislation passed there was a bit of skepticism from reinsurers. I think they told brokers and carriers at the time that it looked positive but they had also been promised in years past that legislation tha
t was passed was going to really impact the market, and that wasn’t always the case. They were taking a more wait-and-see approach to the legislation to make sure it had the intended impact before they would give it full credit.
We never like to see hurricane events in Florida—I live there. With Milton and Helene, that was in my back yard, so we didn’t enjoy evacuating. But ther
e are positives that come out of those situations as well. And one of those with Milton was that it created some really good test cases and the ability to compare that hurricane event with previous events and truly show that the legisl
ation that was passed was transformative. It allowed carriers and reinsurers to become very, very comfortable with the exposures they had and the ability to assess the loss potential. The legislation was taking the uncertainty out of their models, the uncertainty around how much litigation could happen post-event.
If you had attended our summit in January 2025, I would have described the conversation as cautious optimism. Now, nearly 18 months after Milton, the proof is undeniable. As opposed to cautious optimism in 2025, we’ve removed the caution. What we’re hearing from reinsurers is that they a
re actively and proactively taking a look at some of the assumptions that they previously had included in their underwriting and pricing processes, such as litigation
and social inflation, that was a driver of the cost of their reinsurance. They’re reviewing that now and absolutely looking for ways to reduce those types of loads, which is going to have a very positive impact on renewals this year.
IJ: What are your predictions on the June 1 renewals, compared to Jan. 1?
AS: Jan. 1 saw rate reductions; we would expect the same going into the mid-year renewals. The one difference is that we are hearing and seeing that reinsurers are able to proactively review some of the pricing assumptions they were making. I’m not sure they have the same ability throughout the rest of the U.S. and the global reinsurance environment to actively look at reducing loss costs (like Florida has). A carrier or broker may give a headline number, but a reinsurer may see that they’ve actually reduced loss costs. The brokers and carriers may think rates are down “X” amount; the reinsurer may say that, because of reduced loss costs, it’s something less than “X.” I think it’s a good outcome for reinsurers and for the market as a whole.
IJ: Over the last decade, how much have reinsurance rates changed in Florida?
AS: We have a rate online index. (See chart provided by Gallagher Re, below.) A low-water-mark was 2017-2018 and after that. Overall, rates are still elevated from that time but much less so than they were in 2022, when the litigation crisis was peaking.