Big Improvement in Combined Ratio in 2025, Gallagher Says

Last year was a much better year for the once-distressed Florida insurance market, as direct written premium rose, policyholder surplus levels climbed, and the average combined ratio for carriers improved by a stunning 22 points, Gallagher Re reported this week.

Gallagher’s Florida Market Watch, crunching numbers from the National Association of Insurance Commissioners and from S&P’s Global Market Intelligence, said the overall weighted average combined ratio, a measure of profitability with lower numbers indicating a better premium to loss ratio, decreased from 104 in 2024 to just under 82 for 2025 for most carriers in the Florida market.

That’s a big turnaround from 2024, when the Florida combined ratio increased from 97, Gallagher’s recent reports show. By comparison, the U.S. property/casualty industry’s overall average combined ratio improved about 5 points from 2023 to 2024, and about two points last year, recent reports show.

In Florida, 46 of the 61 insurers tracked reported underwriting gains in 2025, an improvement from the 39 companies reporting gains in 2024, the Gallagher report said.

Direct premiums written grew by 1.3% for the Florida market last year, to about $33 billion. Florida specialists, excluding major national carriers’ Florida operations, grew by 13.5%, to $22 billion. That growth was driven mostly by Slide Insurance, which has leaned heavily on takeouts of Citizens Property Insurance policies; and by Privilege Underwriters Reciprocal Exchange, or PURE, which has focused on high-value homes in the state.

Takeouts of policies from the state-created Citizens were frequent in 2025: Some 1.3 million policies were approved for takeout by Florida regulators, and almost half of those were actually removed from Citizen’s policy count.

The major nationals’ Florida subsidiaries, including Allstate’s Castle Key companies and State Farm Florida, saw a drop in direct premium written in 2025, the report said. Citizens reported a decrease in premium of almost 44%.

For the overall Florida market, policyholder surplus climbed to $16.4 billion, up by almost 25% from the previous year. The major national firms’ surplus grew by about 11%, while Florida-specialist carriers rose 35%, to $8 billion, Gallagher noted.

The report listed key indicators for dozens of Florida carriers. Those with the largest improvement in combined ratio include:

• Tower Hill Insurance Exchange – 160% improvement, from 230 to 70
• ASI Preferred – 77% improvement, from 106 to 29
• First Floridian Auto and Home – 69% improvement, from 115 to 46.

Some of the largest Florida-domiciled carriers also reported healthy profits in 2025:

• Universal P&C – 5% improvement in combined ratio, from 103 to 97
• State Farm Florida – 22% improvement, from 90 to 69
• Security First Insurance – 21% improvement, from 85 to 63
• Slide Insurance – 11% improvement, from 77 to 66
• Heritage P&C – 9% improvement, from 93 to 85
• American Integrity Insurance – 3% improvement, from 78 to 75.5

Others’ numbers were not as rosy:

• Florida Peninsula – 1% increase in combined ratio, from 66 to 67
• Frontline Insurance – 18% increase in combined ratio, from 80 to 98

The 12-page Gallagher 2025 report can be seen here. The 2024 report is here.

Topics
Florida
A.J. Gallagher