TALLAHASSEE — The hurricanes' toll on insurance companies isn't all they claim: Annual reports include yet-to-be-reported losses and taxpayers have picked up a third of the bill.

Now, insurers want more.

Without the go-ahead to earn higher profits, industry officials say to expect more announcements like Wednesday's, when Nationwide Florida became the seventh company to say it would cease writing new policies in the state.

"There's a 5 percent limit on underwriting profit but there's no limit on losses," said Robert Hartwig, chief economist for the national Insurance Information Institute and a frequent witness before the Florida Legislature.

"If they can lose billions of dollars, they're going to need to earn billions of dollars."

Proposed in public during the legislative session and privately with regulators, Hartwig and other industry executives have made the case that Florida needs to make itself more "attractive" to capital, the investment money that backs up the policies insurers sell.

In short, Florida needs to offer bigger profits to overcome the scary risks of investing here.

For Floridians who weathered four hurricanes last year to be buffeted by rate hikes and threatened with policy cancellations, it means something else:

Premiums even higher than the 28 percent increase sought by Allstate and the 21 percent just granted Nationwide.

"Floridians have to recognize that this is a dangerous place to live," said insurance institute communications vice president Loretta Worters.

Four hurricanes in 2004 cost the industry $22.9 billion and weather forecasters predict more storms to come, she said. Rising home values and construction make the gamble all the more costly.

Florida residents don't agree.

"California has earthquakes. They have tornadoes in the Midwest. Why should we have to pay more because we have hurricanes?" asked Kathleen Agee, a Melbourne beautician who hears customers gripe daily about rate hikes and cancellations. "I guess I do think it is a profiteering thing."

Records show the industry already is profitable or, as House Insurance chairman Dennis Ross said, "insurers wouldn't still be there."

Companies have been allowed to isolate potential hurricane losses within "independent" affiliates while the profitable parent corporations reap the rewards of other lines, such as auto and life. Florida regulators have yet to force insurers to an all-or-none approach, a tactic used after Hurricane Andrew to bully insurers into providing property coverage.

What's more, financial reports show 2004 didn't hit the Florida subsidiaries as hard as they claim:

• Losses are inflated with hundreds of millions in claims that haven't been made yet and may never be filed.

Allstate Floridian policyholders had yet to file for a quarter of the hurricane losses the company counted at the end of December, more than three months after the last hurricane. State Farm similarly included $495 million in "unreported" claims in its $1.4 billion losses for 2004.

Some new claims are always expected to trickle in after financial books close, but one former insurance regulator called the size of these unreported claims "odd."

• U.S. taxpayers picked up a large share of the unprecedented storm season. The state's three largest insurers, State Farm, Allstate Floridian and Nationwide, received almost $1 billion in federal tax subsidies on their 2004 losses.

• Largely unregulated profits from non-storm years, and earnings from sister companies, offset what remained of the 2004 losses.

Testifying before the Florida Legislature last December, Allstate Floridian general counsel George Grawe said his company lost "every nickel" earned in Florida since its creation following Hurricane Andrew a decade ago.

Allstate Floridian's financial statements show actual reported losses for 2004 erased less than three years of profit.

In that time, the company returned $341 million to its parent, Allstate Insurance Co., as stock dividends and paid Allstate millions more for business services from investment advice to claims handling.

Some of the profit came back after September 2004 as interest-bearing loans and capital investments. Not enough, say financial analysts who rate the insurers.

After Allstate provided $386 million to its Florida subsidiary, and pledged another $375 million if needed, A.M. Best downgraded the Florida affiliate to a B+ with a negative outlook.

There's little interest in risking more in the Florida market.

"We did that twice. I don't think we can go to the cookie jar a third time," Grawe said in an earlier interview.

The doors between parent companies and Florida subsidiaries are conveniently closed when losses mount, argued J. Robert Hunter, director of insurance for the Consumer Federation of America and former insurance commissioner for Texas.

"Their strategy has been to distance themselves from Florida," he said. "If it really gets to something, we can walk away."

Instead, insurers are campaigning for an exemption to the state's 5 percent cap on underwriting profits, meant to prevent "excessive profits."

It already only applies to predicted earnings offset by losses that are often overestimated. Earnings on capital — where the bulk of profits are earned —already are unregulated.

Allstate Floridian reported a 28 percent profit in 2003.

Nevertheless, insurers argue that hurricane risks warrant even richer rewards.

Otherwise, said the insurance institute's Hartwig, "the money would have been better put in a pillow."

At the urging of Grawe and other insurance executives, the Office of Insurance Regulation wrote a rule lifting the underwriting cap. Though drafted in November, it was never subjected to public hearing or mentioned during months of public testimony before Florida lawmakers.

Tuesday, the day it was to be approved by the Florida Cabinet, Insurance Director Kevin McCarty withdrew it, citing concerns raised by Attorney General Charlie Crist and state Chief Financial Officer Tom Gallagher. The two candidates for governor were concerned about rate hikes.

The near approval of something so major illustrates the insurance industry's tendency to seek in secret what won't sell in public.

"We can't get enough rate when the wind isn't blowing," Grawe said in December. "We would be making a 'ridiculous' amount of money in the non-storm years."

"Yes, somebody could demagogue it and say you'll give some company a higher return, but that return is justified by the risk," said Rade Musulin, the Florida Farm Bureau Insurance executive who proposed the rule change to McCarty in a March 2004 letter co-signed by Grawe.

He proposed it as a way to attract needed capital to Florida's insurance market, long before hurricanes Charley, Frances, Ivan and Jeanne. Musulin is worried about something bigger on the horizon.

"The demagogues have it wrong," he said. "Where we get the capital to pay for the $50 billion hurricane is a big deal. We've got to get that money from somewhere."

Without more money from their parent corporations, insufficient capital is a problem for Florida insurers.

Financial stability ratings for Allstate Floridian, Nationwide Florida and State Farm Florida, as well as home-grown entities like Atlantic Preferred, are tumbling.

Nationwide Florida met its Aug. 3 downgrade by A.M. Best to a "B" (fair) by killing plans to form a new company to shoulder its Florida hurricane risks, Nationwide Atlantic.

Last week, Nationwide Florida announced it will join Allstate Floridian and Safeco in a Florida policy freeze, and turn away what little new business it was taking.

"We scaled back after the hurricanes last year. It reflects our attempts to manage" hurricane risks, said corporate spokesman Joe Case in Ohio.