United P&C to exit Florida’s homeowner’s insurance market

ST PETERSBURG, Fla. – St. Corp. (UPC) announced on Thursday.

United P&C was downgraded by Demotech from an exceptional “A” to “M” on August 1, and it says it has received notice that its rating has been downgraded.

“Due to the uncertainty surrounding the future availability of insurance for our business, I believe that putting United P&C in place is prudent and necessary to protect the Company and its policyholders. The Company is committed to pursuing opportunities to benefit our people, technology, etc. Our business The business continues to thrive and provides the Company with a sustainable platform to create new engines of growth and profitability,” Dan Peed, Chairman & CEO of the company said in the release.

The company said it has received approval to leave Louisiana, but is pending in Florida and Texas.

Guy Fraker’s research called ‘Florida’s P&C Insurance Market: Heading for a Fall’carried out by the Senate Banking and Insurance Committee, found that UPC was one of the companies that lost the most money in 2019.

His recorded losses were 35,544, and his net losses were 20,828. In 2019, UPC had about 5.3% of the Florida market with 761,039 points. They also had 1,405 pending cases, an 80% increase from 2016.

United P&C was also the only company to date to enter the Florida Office of Insurance Regulation’s (OIR) temporary market reorganization that took place on July 27.

OIR created a type of reinsurance program through the Citizens Property Insurance Corps. Demotech has notified at least two insurance companies that their ratings have been downgraded, according to the OIR letter. Their goal with the program was to allow companies to continue to write state laws and keep homeowner laws in line with the state’s lending requirements.

United P&C is following several companies to exit the Florida homeowner’s insurance market. Recently, Banks, also based in St. Petersburg, announced that they will be removed from Demotech and will no longer be offering homeowner policies in the state.

That same week, Weston Property Insurance was divested by Demotech and placed into receivership by OIR. It was the fifth insurance company operating in Florida to enter receivership this year, now driving over a million homeowners to receive insurance through the last state-sponsored insurance company – Citizens.

Insurance Information Institute spokesman Mark Friedlander tells ABC Action News UPC may go into receivership.

“It appears that we are on the verge of Florida’s sixth default this year, and the third default since the special legislative session took place at the end of May. This is another sign that Florida’s insurance market continues to deteriorate with no signs of stability. Despite the company’s announcement does not refer to the Florida market stabilization program, it appears that the state’s plan to use citizens as a means of reimbursing for the downgraded insurers has not been approved by the federal mortgage servicers Fannie Mae and Freddie Mac. The UPC has already been downgraded from A (Exceptional) to “M (Moderate) and Demotech before today’s delisting. Usually, the next step after a delisting is for the insurance regulator to declare the company insolvent and start filing receivership and winding-up proceedings,” Friedlander said.

In a later statement, Friedlander added, “At an earnings call in May, UPC announced that it has approximately 180,000 Florida residents, making it one of the largest insurers in Florida.”