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Commercial property owners in Florida are no strangers to the unique challenges posed by the state’s unpredictable weather patterns and natural disasters. To safeguard their investments, property owners often rely on insurance coverage. However, what many may not realize is that insurance premiums for commercial properties in Florida can be significantly influenced by another factor – interest rates. In this article, we will explore how interest rates affect insurance premiums for commercial properties in the Sunshine State.

The Link between Interest Rates and Insurance Premiums

Interest rates play a crucial role in shaping insurance premiums. These rates, set by central banks, impact the overall financial climate. When interest rates rise, insurance companies will incur higher costs for re-insurance and investment returns and maintaining reserves. Consequently, they may adjust their premium rates to compensate for these increased expenses.

In Florida, where hurricanes, floods, and other natural disasters (World Wide) are a constant threat, insurance premiums can already be substantial. When interest rates rise, insurance companies may increase premiums further to mitigate financial risks, as they may need to pay out larger claims due to more frequent and severe weather events.

Mitigating the Impact

While property owners may not have control over interest rate fluctuations, they can take steps to mitigate the impact of rising interest rates on insurance premiums:

  1. Risk Mitigation: Implementing risk management strategies such as building upgrades, hurricane-resistant materials, and flood mitigation measures can help reduce insurance costs.
  2. Insurance Shopping: Periodically reviewing insurance policies and shopping around for competitive rates can help property owners find the best deals, even in a changing interest rate environment.


Interest rates are a hidden variable that can significantly influence insurance premiums for commercial properties in Florida. As property owners brace themselves for the unpredictable weather patterns of the region, they should also keep an eye on interest rate trends and consider strategies to manage the impact on their insurance costs. By staying informed and taking proactive measures, property owners can better protect their investments and ensure their businesses thrive, come rain or shine.


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Multiple severe thunderstorms threw a vicious punch at the commercial real estate industry in the first half of 2023, leaving it with the highest spike in premiums at 18.3%.

The storms accounted for insured losses of around $34 billion in the US alone, which is nearly 70% of global insured natural catastrophe losses in that time and the highest ever insured losses in a six-month period.

Perhaps not surprisingly then, CRE received the highest increase in insurance premiums among any insurance business lines in the second quarter, according to The Council of Insurance Agents & Brokers’ Commercial Property/Casualty Market Report.

In the report, respondents again pointed to rising property values (as a result of inflation) and natural catastrophe losses as the major contributors to the difficulties with this line.

Furthermore, a report by Swiss Re showed this number reached in just six months, is almost twice as high as the annual average natural catastrophe losses for the past 10 years, $18.4 billion.

CIAB suggested that these losses likely further contributed to carriers pulling back on underwriting commercial property—especially coastal property.

One respondent from a large Southeastern firm said today it is “very difficult to insure in the standard markets.”

Others commented that “property deductibles continued a steady upward march” and that carriers were still “pushing increases in property values,” calling it a lingering effect of inflation.

Reinsurance was another troubling aspect.

“Due to lack of reinsurance support, commercial property capacity has been reduced,” explained one respondent from a large Northeastern firm.

In fact, 80% of respondents reported a decrease in commercial property capacity, and nearly half of them described that decrease as significant.

Another respondent from a large Midwestern firm said that the reinsurance market was so difficult for some companies they had to non-renew property because of capacity issues.


Source:  GlobeSt.