For the first time in three years, Florida's struggling domestic residential property insurers have posted a quarterly profit.

Excluding Citizens Property Insurance Corp., Florida property insurers reported $38.6 million in profit in the first quarter of 2023, according to an analysis conducted by S&P Global Market Intelligence. That compares to a loss of almost $120 million a year earlier.

Reporting periods may not include the same number of companies, as nine property and casualty (P&C) insurers focused on Florida have become insolvent since 2021, while others have have entered the market.

A sizable jump in investment income gave Florida P&C carriers a big boost during the period. Collectively, the group reported $97.4 million in investment income during the first quarter, more than double what they saw in the first three months of 2022. The most recent quarter's total was the highest recorded investment income since the $110.0 million the group reported in the fourth quarter of 2020.

Operating income remained in the red for the 16th consecutive quarter as underwriting losses came to $28.2 million. But that was considerably better than the underwriting losses of $148.7 million in the first quarter of 2022.

Citizens keeps growing

Substantial premium growth for Citizens, the state's insurer of last resort, pushed it into the list of the 10 largest homeowners writers in the US during the first quarter of 2023. Citizens recorded $966.6 million in total direct premiums written in the first quarter of 2023, two-thirds of which was within the homeowners line of business. Citizens' premiums were up about 75% from the prior-year period.

The insurer of last resort added 94,000 policyholders in the first quarter, ending the period with 1.24 million policyholders. Another nearly 80,000 policies were added during the three-month period that ended June 30.

Citizens' in-force policy counts may swell further as Farmers Insurance Group of Cos. recently said it would exit the Florida market. The change applies to its Farmers-branded personal line policies and will not affect residential policies sold through its Foremost subsidiaries.

Farmers' Truck Insurance Exchange had 91,648 residential property policies in force as of March 31, with another 5,835 within its Farmers Casualty Insurance Co. unit, according to a Florida Office of Insurance Regulation market share report. The two Foremost units had 53,544 residential policies in force.

– Download a template that provides market share for property and casualty insurers. – Read S&P Global Market Intelligence's 2023 US property and casualty market report.

American International Group Inc. is also curtailing its homeowners business in the Sunshine State. The Wall Street Journal reported June 8 that AIG would stop writing business in 200 high-risk ZIP codes spread across seven states: Colorado, Delaware, Florida, Idaho, Montana, New York and Wyoming. That move comes on top of restrictions it already placed in California.

Florida's insurance regulator has seen more interest in Citizens' depopulation program this year than in 2022. The regulator has already approved 91,000 policies to be taken out, with an additional 184,000 policies requested with an October assumption date.

Slide Insurance Co. agreed to take 25,000 policyholders from Citizens, with an expected transfer date of Aug. 22. Slide tallied $187.0 million in direct premiums written during the first quarter of 2023, a year-over-year decrease of 12.5%.

Loggerhead Reciprocal Interinsurance Exchange assumed another 1,000 policies from the state-run insurer. Loggerhead was formed in September 2022 with the intent to underwrite homeowners policies in Florida.