Florida Insurers Face Rating Downgrades
The Florida-based home insurance companies are at it again. In a recent Insurance Journal article on the health of the state’s insurance market, more than a third of the domestic insurers are in danger of receiving rating downgrades. They are blaming the continuing claims from the storms of the past few years and skyrocketing non-AOB water claims. This coupled with lower interest from the international reinsurers and increasing reinsurance rates, has many companies requesting higher rates from insureds.
At Insurance Litigation Group, our attorneys and field specialists have been busy statewide, assisting homeowners, contractors and public adjusters with their disputes with insurance companies for Michael, Irma and non-storm claims. We have been doing this successfully for more than 15 years and look forward to working with you to achieve fair compensation for your claims. We are here to answer any questions you may have and look forward to your call. 786-529-0090 | 850-919-4357
More Than a Dozen Florida Insurers Facing Ratings Downgrades
By: Amy O’Connor
Domestic insurers in Florida are to receive downgrades in their financial stability ratings because of the decline of the condition of the property insurance market in Florida, and over 40 insurers are to be affected.
According to the Insurance Journal, Demotech’s President Joe Petrelli has stated that names of the insurers facing this will not be disclosed, however he believes that there will be two to four downgrades before February begins, and another four to six by the end of March 2020. He also says that the effects of both the current market forces and the carrier specific financial metrics have caused for a negative financial environment, leaving insurers to deal with the aftermath.
Why the change? The economics of the marketplace in recent years have a lot to do with it. It has caused problems for Demotech while attempting to sustain Florida focused carriers that are reviewed each quarter.
Petrelli believes that as many as 18 of the over 40 companies that Demotech reviews “will not produce a level of pre-tax profitability consistent with sustaining an FSR at the A level nor position themselves to do so in the near term” and says there are various factors contributing to this.
The President and CEO of the Florida Association of Insurance Agents (FAIA) Jeff Grady reminds people that Demotech has discussed similar possible downgrades in the past, and they have not actually occurred, but does recognize the current state of the domestic property market. Florida insurer financial troubles will remain if the market continues to decline, causing various events to occur as a result.
Demotech has released various steps that carriers should take to help improve their own financial stability during these times. To see the full list of steps, click here.