Perhaps almost ten years later, the storm has passed. After canceling hundreds of thousands of Florida homeowner's insurance policies over the past decade, State Farm said on Friday it will expand its property insurance business.
The company, which was once Florida's largest property insurer, confirmed its expansion in a carefully-worded statement to FOX 13.
"We have shared business information with agents about State Farm Florida's efforts to expand our offering of new Homeowner and Renters policies on a limited basis," State Farm said in its statement.
The company said it could not provide details as to how many policies it would add, where it would assume risk, or the rates it will charge.
"We are limited in our ability to discuss specific details about future plans due to constrictions of antitrust laws," the company said.
State Farm exited Florida's sometimes topsy-turvy property insurance market in 2009. The company's headline-grabbing move came five years after the hurricanes of 2004. State Farm said a wave of government-imposed caps on rate increases had weakened its financial position.
Ultimately, State Farm's bet might have been a bad gamble. The tropics have been quiet, Florida has been spared serious damage, and recent Office of Insurance Regulation figures show the Florida property insurance business can be a serious money maker.
In 2012, for example, property insurance companies collected more than $7.7 billion in premiums from Florida homeowners, according to the OIR's annual report. But those companies paid only $2.5 billion in customer losses, thanks largely to a quiet hurricane season.
The difference of approximately $5 billion cannot be considered purely profit due to operating expenses such as commissions to agents. Even still, a margin of $5 billion per year could be viable for business.
State Farm‘s statement seems to recognize its bad bet -- and this new opportunity.
"We recognize the unique challenges of the Florida insurance market, and continually evaluate and monitor our ongoing efforts to responsibly manage our growth in Florida," the company said.
FOX 13 / WTVT-TV
Didn't find what you were looking for?