On the cusp of summer, as forecasters predict an active hurricane season, it is timely to compare and contrast the property and casualty insurance market in two states that often bear the brunt of severe tropical weather activity, Louisiana and Florida. 

A recent article from Insurance News Net paints a picture of the upbeat forecast for the insurance market in Louisiana stemming from legislation passed in 2007 aimed at attracting new insurers and decreasing the reliance on the state’s insurer of last resort.

Contrasting that, SNL is reporting that an increase in insolvencies in the Florida insurance marketplace, potential rate declines, and an uncertain political and regulatory situation are scaring the insurance industry in the Sunshine State.  And that is in addition to the possible increase in severe weather this hurricane season.

In both states, the current economic situation in has created a surge in the stress related to employment and home values, which has led to a rapid increase in the frequency and size of non-catastrophe type losses since the end of 2006.  This erodes profit from insurers in these non-hurricane years when they should be earning large underwriting gains to finance future storms.

What are your thoughts on the insurance industry in Louisiana and Florida?  Does Florida need to take a page from the Louisiana play book to bolster their insurance industry? Let us know.