Anticipated changes to Florida’s property and offshore insurance carriers by rate regulator Demotech have begun, with United Property & Casualty Insurance Company downgraded two notches to “M”, while insurers FedNat and Weston they were all removed.
At the same time, Demotech has certified several Florida carriers to “A” as well.
Demotech warned many of Florida’s property insurance carriers that they may face lower ratings, prompting the replacement of Florida’s Insurance Commissioner and CFO.
The deadline for revising the ratings was July 26, but Demotech pushed back to allow more time to review Florida carriers’ ratings and participate.
The move drew mixed reactions, with the Florida Office of Insurance Regulation (OIR) announcing a plan to re-establish a temporary insurance system through Citizens Property Insurance Corporation to support downsized, but active carriers.
We shared more about the plan with Citizens yesterday.
At the same time, there have been calls to review Florida’s reliance on Demotech.
Now, the first updated version has come out from Demotech, with some names you can expect to see, some less so.
United Property & Casualty Insurance Company (UPC), the carrier of United Insurance Holdings Corp., has been downgraded two noches to “M” by Demotech.
This is perhaps not surprising, as the company has just come back from consolidating its business in Florida and reorganizing its four carriers into two.
Next, FedNat Insurance Company, a carrier that has experienced turmoil in recent months and has been hit hard by catastrophic losses in recent years.
The restructuring and downsizing process in Florida was under the supervision of the regulator, moreover, FedNat had already lost its “A” and was downgraded to “S”, so it is not surprising to hear that Demotech has now been removed. Total FedNat score.
The final carrier is Weston Property & Casualty Company, a property insurer in which ILS, reinsurance and transportation investment manager Hudson Structured Capital Management (trading as HSCM Bermuda) has a majority stake.
Weston had his “A” preempted, so now he has an “NR” from Demotech.
As a reminder, it was Weston who went to the high risk market in 2022 to get additional insurance support, with $45 million for Marlin Re Ltd. (Series 2022-1).
Foreclosures, as FedNat and Weston have now challenged, have often come to the carrier before the Florida regulator can take action, or even fail.
The “M” rating, which UPC Insurance is now available, is often seen as the easiest place to recover.
However, with the new Citizens Sponsored Guarantee announced by the Florida Office of Insurance Regulation (OIR), it will be interesting to see what the reductions and exclusions actually mean this time around.
The “M” rating from Demotech is not accepted by the housing market, meaning that UPC may be the first carrier to test this new system.
It is difficult to know what will happen with the removal of FedNat and Weston, but this can be tested by the regulator to determine whether the companies are likely to fall under the housing market, with certainty. a Citizen above the level of FIGA claims.
Several carriers had their “A” ratings confirmed yesterday, including: American Coastal Insurance Company, American Integrity Insurance Company of Florida, American Mobile Insurance Exchange, American Platinum P&C Insurance Company, American Traditions, Bankers Insurance, Centauri Specialty, Edison Insurance Company, Florida Family Home Insurance, Florida Peninsula, Great Northwest, Hawaiian Insurance and Guaranty Company, Heritage P&C Insurance, Homeowners Choice, Kin Interinsurance Network, Ocean Harbor Casualty Insurance, Safe Harbor Insurance, Safepoint, Slide Insurance, Hillern Oak, Tower Insurance Exchange, Tower Hill Prime, TypTap, US Coastal, and Vyrd.
There are some missing names, which have not yet been confirmed or any changes to their plans, so there may be some changes coming in the coming days.
Read all of our news and analysis of the Florida insurance and reinsurance market.