ALIRT Research Finds A Sharp Divergence in Residual Property Market Performance Across Four Higher-Risk States

ALIRT Insurance Research recently released its bi-annual analysis of residual property insurance markets in California, Florida, Louisiana and Texas, which finds that property insurance conditions in the four states continue to face disparate challenges despite broad improvement in U.S. property insurance profitability.

HARTFORD, Conn., Aug. 3, 2026 /PRNewswire/ -- ALIRT's report, "Residual Property Market Trends in Four Higher Risk States", acknowledges upfront the dramatic rebound in underwriting results for U.S. property lines in 2025, with the homeowners insurance line alone generating approximately $17 billion of underwriting profit, its strongest result over the past decade.

ALIRT cautions, however, that this improved national backdrop should not mask localized challenges facing a number of states with higher exposure to catastrophic loss events. In ALIRT's opinion, these challenges are often best understood by tracking the expansion or contraction of – and profitability trends within – a state's residual insurance market.

To this end, ALIRT's study shows total premium growth, policy issuance, net exposure, and profitability for each of the four states FAIR Plans over the past 15 years, indicating how these trends have precipitated reforms (or lack thereof) in each jurisdiction over time. 

According to ALIRT, property insurance conditions in California remain the most acute as the state continues to wrestle with the fallout from growing wildfire losses over the past decade. A brewing crisis was greatly exacerbated by the early 2025 Los Angeles fires which produced massive losses for the California FAIR Plan. 

This plan, already facing a sharp rise in participation over the prior four years, saw its policy count balloon in 2025 with direct premium written approaching the $2 billion mark. In response, the plan was forced to impose a $1 billion assessment on admitted property insurers and will increase rates by almost 30% later this year. In addition, the state has adopted a series of reforms in hopes of stabilizing the private market, including greater leeway in private market pricing models, as well as new liquidity tools and mitigation discounts, among others.

Florida presents a stark counterexample. Following legislative, regulatory and litigation reforms beginning in late 2022, participation at Citizens Property Insurance Corporation (the state's FAIR Plan) is currently at its lowest level on record and in 2016 the insurance plan was able to usher in its first rate decrease since 2015. In addition, the state has attracted a slew of new private insurer entrants and as well as renewed reinsurance capacity.

The report finds more nuanced experience at the residual property insurance plans of Louisiana and Texas. Louisiana Citizens Property Insurance Corporation (the former state's FAIR Plan) is in recovery following a sharp spike in policyholders following large Gulf storm losses in 2020-2021. Legal and regulatory reforms, along with monetary incentives for take-out insurers, have helped but ALIRT notes that challenges remain. 

Texas, for its part, remains comparatively healthy statewide, with the combined Texas FAIR Plan and Texas Windstorm Insurance Association accounting for only about 5% of statewide homeowners premium in 2025. That said, residual property market exposure is on the rise, though participation is largely concentrated in heavily populated coastal areas rather than across the entire state.

The report concludes that residual market trends can serve as an early warning system for potential financial weakness within private insurance markets, especially at smaller, geographically concentrated carriers that may have less capacity to absorb catastrophe losses, adverse regulation or prolonged market disruption.

For more information or to request the full report, please contact [email protected] or visit www.alirtresearch.com.

About ALIRT Insurance Research

ALIRT Insurance Research is an independent financial analysis firm specializing in monitoring insurer solvency and performance trends for institutional clients. Based in Hartford, Connecticut, ALIRT provides analytical insights that assist organizations in managing insurance company exposure and maintaining fiduciary oversight.

SOURCE ALIRT Insurance Research