A coalition of business, consumer, and environmental groups found vindication Tuesday in the insurance industry’s ability to absorb the damage from Hurricane Matthew.
Stronger Safer Florida in a news release credited “good luck and prudent decisions by the Florida Legislature” for the industry’s ability to weather the storm.
Specifically, lawmakers and regulators invested in the Florida Hurricane Catastrophe Fund — the Cat Fund — and in reinsurance that shifted the risk out of state, the organization said.
Both are priorities for the organization, which says it wants to make sure Citizens Property Insurance Corp. remains a true insurer of last resort, and that the Cat Fund remains adequate to any disaster.
“Florida will continue to have a positive financial outlook because of the risk that has been offset by investments in the [Cat Fund],” said Tom Feeney, president and chief executive officer of Associated Industries of Florida, one of Stronger Safer Florida’s constituent groups.
“Florida consumers can rest assured that their monthly premiums will not skyrocket,” said Bill Newton, deputy director of the Florida Consumer Action Network, another constituent.
“A substantial portion of the claims associated with the storm will ultimately be paid out by a pool of new money flowing into the state, primarily from a global network of reinsurers who have diversified their risk,” Newton said.
Matthew originally was forecast to inflict $20 million damage to the Southeastern states, but insurers now believe the hit will amount to between $5 million and $10 million.
The Legislature created the Cat Fund in a special session in 1993, following Hurricane Andrew. The trust fund reimburses insurers for some of their losses following disasters. As of May, it had $13.7 billion in its coffers.