The Massachusetts Division of Insurance coverage lately launched its 2023 Annual Dwelling Insurance coverage Report, offering a complete retrospective of what proved to be a pivotal yr for the Commonwealth’s insurance coverage panorama. This knowledge confirms most of the market developments we’ve noticed materializing over the previous two years for the Massachusetts Property and Casualty house. This text will spotlight the specifics of this report and what the report reveals in regards to the current householders’ insurance coverage market in Massachusetts. Please word all graphs and charts are reprinted from the Report, courtesy of the Massachusetts Division of Insurance coverage.
Market Composition: Regional Carriers Preserve Sturdy Presence
Massachusetts householders collectively paid roughly $3.4 billion in dwelling insurance coverage premiums throughout 2023, representing a considerable 17.9% enhance from 2022 ranges. This premium progress occurred regardless of a slight lower in whole insurance policies (down 0.33% or 7,041 insurance policies) – with homeowners’ insurance policies rising by 19,294 whereas tenant and condominium insurance policies decreased by 26,335.
The market remained characterised by a robust regional service presence in 2023. MAPFRE Insurance coverage Group (father or mother of Commerce Insurance coverage) maintained the biggest market share at 12.5% of the voluntary market. The subsequent largest carriers included Liberty Mutual (9.2%), Security Group (6.5%), and the Andover Group (6.5%).
Among the many high 10 dwelling insurance coverage teams, solely 5 supplied protection nationally (Vacationers, Liberty Mutual, Chubb, Amica, and USAA), whereas the remaining leaders have been regional firms targeted totally on the Northeast. The highest 25 insurers collectively accounted for 91.7% of the non-FAIR-Plan Massachusetts market, whereas the remaining 44 teams and 4 particular person firms wrote 7.8% of the market.
FAIR Plan: Enrollment Decreases, Monetary Efficiency Improves
The Massachusetts FAIR Plan, serving because the residual market since 1968, confirmed indicators of stabilization in 2023. The Plan’s coverage depend decreased by 3,197 insurance policies between fiscal years 2022 and 2023, representing 8.3% of written premium out there – a big enchancment from its peak market share of 16.1% in 2007.
Regional disparities in FAIR Plan reliance remained pronounced. Whereas the FAIR Plan wrote below 10% of insurance policies in most counties, it nonetheless supplied 33.0% of dwelling insurance coverage insurance policies within the Cape and Islands area (Barnstable, Dukes, and Nantucket counties).
Financially, the FAIR Plan posted an underwriting lack of $129 per coverage in fiscal yr 2023, an enchancment from the $177 per coverage loss in 2022. It’s value noting that the FAIR Plan had not filed to revise its charges since 2013 when it requested a 6.8% enhance that was finally disapproved in 2014.
Claims Exercise: Vital Will increase in Frequency and Severity
Claims exercise elevated dramatically in 2023, with insureds submitting 86,330 claims – a putting 67.6% enhance from 2022. Eight catastrophic occasions resulted in roughly $892.3 million in property losses through the yr, in comparison with $208.3 million of disaster losses in 2022.
Water harm and freezing (non-flood associated) accounted for almost all (54.0%) of whole claims submitted. Nevertheless, when analyzing the greenback worth of claims:
- Hearth, lightning, and removing: 29.0% of whole losses (down from 39.2% in 2022)
- Non-flood water harm and freezing: 46.5% of losses (up from 40.3% in 2022)
- Wind and hail: 12.2% of losses (up from 7.4% in 2022)
- Legal responsibility and medical funds: 3.9% of losses (down from 4.6% in 2022)
- Theft: 0.5% of losses (down from 0.7% in 2022)
- All different: 8.0% of losses (up from 7.8% in 2022)
The common declare measurement different considerably by reason for loss. Hearth claims averaged $63,155 (down from $103,864 in 2022), wind claims averaged $11,549 (up from $10,282 in 2022), and water harm claims averaged $16,206 (down from $18,885 in 2022).
Loss Ratios and Monetary Efficiency
The general loss ratio for the market was 51.2% in 2023, up from 42.2% in 2022. By coverage type:
- Conventional householders insurance policies: 51.3% loss ratio
- Condominium protection: 60.4% loss ratio
- Tenant protection: 27.5% loss ratio
The adjusted mixed ratio (which incorporates bills and dividends) elevated to 86.1% in 2023 from 77.9% in 2022. The expense ratio part remained comparatively secure at 31.4% (in comparison with 32.0% in 2022), whereas mutual firm dividends to policyholders remained constant at 0.5%.
The Adjusted Mixed Ratio Chart from the 2023 Annual Householders Report
Coastal and City Market Dynamics
The DOI continued monitoring policy availability in “designated” zip codes (both coastal and urban areas) that have historically had availability concerns. In 2023, the top 25 companies and the FAIR Plan reported:
- 582,200 policies in force in urban and coastal areas as of December 31, 2023 (381,426 in urban areas, 200,465 in coastal areas)
- 95,847 policies canceled (78,305 by insurance companies, 17,542 by FAIR Plan)
- 72,919 cancellations in urban areas and 22,928 in coastal areas
- 65,011 cancellations were policyholder-initiated; 30,836 were insurer-initiated
Of the insurer-initiated cancellations:
- 3,447 occurred within the first 60 days of coverage
- 25,144 were due to nonpayment
- 2,245 were for other reasons permitted by law
Regarding nonrenewals, there were 9,248 policies nonrenewed in designated zip codes (7,526 by the top 25 companies, 1,722 by the FAIR Plan). Three companies – Heritage Insurance Holdings Group, American International Group, and Barnstable Group – had the highest nonrenewal percentages in 2023.
Claims History and Nonrenewal Correlation
The report reveals a clear correlation between claims history and nonrenewal decisions. Of the 456,219 urban or coastal policies renewed by the top 25 companies, there were approximately 27,918 claims filed (61 claims per 1,000 policies) with an average claim size of $13,330.
In contrast, the 7,069 nonrenewed policies had 1,832 claims (259 claims per 1,000 policies) with an average claim size of $22,121.
When comparing urban and coastal areas:
- Urban renewed policies: 55 claims per 1,000 policies, average claim size $12,669
- Urban nonrenewed policies: 186 claims per 1,000 policies, average claim size $31,404
- Coastal renewed policies: 77 claims per 1,000 policies, average claim size $14,477
- Coastal nonrenewed policies: 351 claims per 1,000 policies, average claim size $16,000
Despite this correlation, the vast majority of policyholders with claims histories were still renewed – 96.8% in urban areas and 91.9% in coastal areas.
Wind Deductibles: Prevalent in Coastal Areas
Wind deductibles remained a prominent feature in 2023, particularly in coastal areas. Of all policyholders in coastal areas, 60.0% had mandatory wind deductibles, compared to just 19.9% in urban areas. Overall, 33.6% of policyholders in coastal or urban areas covered by the top 25 companies or the FAIR Plan had a mandatory wind deductible.
All but six of the top 25 companies reported using mandatory wind deductibles, with deductibles reaching up to 5% of dwelling coverage value in the coastal parts of Bristol, Plymouth, Barnstable, Dukes, and Nantucket counties.
The DOI continued encouraging insurers to allow mitigation measures to reduce or eliminate these deductibles, with some companies establishing clear programs for mitigation credits.
Climate Mitigation Efforts
The industry’s focus on climate risk mitigation gained significant traction in 2023. The DOI surveyed the top 25 insurers and the FAIR Plan on climate resilience initiatives, finding:
- 18 companies offered premium credits or reduced rates for certain loss mitigation measures
- Six reduced or eliminated wind deductibles for mitigation features like hurricane shutters
- Eight insurers reported that considering policyholder mitigation measures increased their capacity to write homeowners insurance in Massachusetts
- 14 companies reported using community-level resilience data from sources like commercial catastrophe models and ISO’s Building Code Effectiveness Grading (BCEG)
- One insurer provided premium credits for LEED (Leadership in Energy and Environmental Design) certified homes
The NAIC Climate and Resiliency Task Force made significant progress in 2023, including:
- Adoption of a revised Climate Risk Disclosure Survey aligned with international standards
- Updates to the Risk-Based Capital formula to include specific charges for hurricane, earthquake, and wildfire risks
- Creation of a Catastrophe Modeling Center of Excellence to better understand how climate risk is incorporated into models
Flood Insurance: Coverage Gap Persists
Despite increasing flood risks, flood insurance take-up rates remained low in 2023. FEMA reported 54,997 flood policies in Massachusetts in 2023, an increase of 6.2% from 51,805 in 2022. However, this represented only a small fraction of insured properties:
- Barnstable, Dukes, and Nantucket counties: 8.9% of homes had flood insurance
- Plymouth County: 4.9% of homes had flood insurance
- Essex County: 3.5% of homes had flood insurance
- Suffolk County: 3.4% of homes had flood insurance
- All other counties: under 2.5% of homes had flood insurance
FEMA’s Risk Rating 2.0, effective for new policies in October 2021 and renewal policies in April 2022, was fully operational throughout 2023. This methodology incorporated more flood risk variables, including flood frequency, multiple flood types, distance to water sources, and property characteristics.
The private flood insurance market showed growth, with private flood coverage increasing to $8,705,496 in direct written premium on 4,558 residential flood policies (year-end 2023), plus $1,792,571 in direct written premium on 2,307 private residential endorsements.
Premium Trends by Policy Type
Average premiums increased across all policy types in 2023:
- Traditional homeowners: $2,054 (up from $1,818 in 2022)
- Condominium: $530 (up from $473 in 2022)
- Tenant: $181 (up from $176 in 2022)
Total premium by policy type:
- Traditional homeowners: $3.26 billion (up from $2.76 billion in 2022)
- Condominium: $74.3 million (up from $69.4 million in 2022)
- Tenant: $76.6 million (up from $160.4 million in 2022)
Market Distribution by County
The report provides detailed insights into policy distribution across Massachusetts counties:
- Middlesex County had the highest number of home insurance policies in force (485,634), followed by Worcester (259,896), Essex (240,080), and Norfolk (227,438) counties
- Between 2022 and 2023, the number of home insurance policies remained fairly consistent in most counties
- The voluntary market maintained high market shares in most counties: 97.9% in Middlesex, 97.0% in Worcester, 94.1% in Essex, and 97.0% in Norfolk.
- The FAIR Plan’s presence varied significantly by region, from just 2.1% in Middlesex County to 33.0% in Barnstable, Dukes, and Nantucket counties.
FAIR Plan Clearinghouse Initiative
The report mentions the FAIR Plan’s Clearinghouse initiative, implemented in 2018 to help insurance companies work with producers to give more FAIR Plan policyholders opportunities to find coverage in the voluntary market. This depopulation initiative allows participating carriers to access non-personally identifiable information about FAIR Plan policies to identify potential voluntary market opportunities.
Looking Back from 2025
Looking back at 2023 from our current perspective 2025, we can now see that year represented a significant transition point for the Massachusetts home insurance market. The substantial increase in catastrophe losses, rising claim severity, and growing emphasis on climate risk mitigation foreshadowed many of the market adjustments that have occurred since then.
The data in this report provides valuable context for understanding the current market conditions and offers a benchmark against which to measure the subsequent evolution of our unique Massachusetts insurance landscape.
For insurance professionals serving Massachusetts property owners, this historical perspective offers valuable insights into the underlying factors that have shaped today’s market realities—and may provide clues to the challenges and opportunities that lie ahead.
Free Copy of the Complete Report
For your own copy of the report, Click on this link to the Division of Insurance website: “2023 Annual Homeowners Report.“
