Legislation in Florida requiring the state's residual market insurer to reduce prices has cut its revenues dramatically and created actuarially unsound insurance rates, according to a brokerage executive.
Speaking earlier this month during the Stephens Springs Investment Conference in New York, Powell Brown, president of Daytona Beach, Fla.-based Brown & Brown, detailed how rates have changed over the past few decades to a point where they are almost half of what they once were prior to the 2005 hurricane season.
Florida is a major piece of the broker's business, Mr. Brown noted. Of $878 million in revenue last year, Florida accounted for $345 million. In its wholesale business alone, which accounts for 19 percent of Brown & Brown's business ($163 million in revenue), Florida's portion was approximately $90 million.
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