Please call  Lee from Calles Financial at 954-270-7966, Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance & Financial Products, Business  & Commercial Policies, and Group Products for business owners to give Employees benefits at no cost to the employer.

Any rating lower than A w/Demotech means they cannot do business in Florida. Many Carriers have already been sold, but so many have issues and now rates will increase more w/ availability of coverage less likely as well. With all of this going on Tallahassee still has no bill to handle this crisis!!!!

Ratings agency Demotech is currently reviewing the 2019 fourth quarter earnings and year-end financials of the Florida insurers it rates after indicating in January that several Florida domestic insurers could receive rating downgrades. Demotech President Joseph L. Petrelli provided the following comments on the current state of Florida’s residential property insurance market in response to a request for an update from Insurance Journal.

Although it is premature to provide Insurance Journal with details on Demotech’s assignment of Financial Stability Ratings (FSRs) based upon our review and interpretation of year-end 2019 financial statements, our perspective on the current state of the residential property insurance market in Florida will materially impact our interpretation of the year-end 2019 operating results of the more than forty Florida-focused carriers that we review and analyze on at least a quarterly basis. We provide some thoughts on that aspect of your request, for your consideration

As we see the situation, market forces as well as carrier specific financial metrics have created an environment that results in the Island named Florida. Insurers have been impacted by:

  • Insurer investor capital exiting rather than entering Florida
  • Current holding company debt, infused to support growth, permit the strengthening of loss and loss adjustment expense reserves without a diminution of surplus, or otherwise support the implementation of business models, are at burdensome levels given the natural disasters of 2016 through 2019, and the impact on both annual profitability and balance sheets.
  • The cost of catastrophe reinsurance has been, and will be in the future, a financial shock to the income statements of carriers.
  • The cost of reinsurance, i.e., dollar amount of cessions, impacts the net dollars carriers retain to honor or defend the meritorious claims of their policyholders, and operating expenses, etc.
  • Although carriers can “true up” reinsurance costs by making the necessary filings with the State of Florida Office of Insurance Regulation, the financial impact of paying higher reinsurance costs is short-term and the financial benefit of “true up” accrues over a longer term. The mismatch in timing adversely impacts carriers, given the other conditions.
  • Over the past few years, the cumulative impact of rate revisions at a percentage change that eliminates the time and expense of a hearing, i.e., less than 15%, has had cumulate impact on carrier rate adequacy, and their concomitant ability to withstand current conditions.
  • In an operating environment characterized by frequent disruption of claims procedures, such as the AOB decision, Sebo, Johnson, Joyce, and other decisions revised the claim settlement landscape and set insurers and the actuaries they depend upon on their heels.
  • Over the past several years, the revised rules of engagement on claims settlement, set by the judiciary, have had their impact magnified by the natural disasters of 2016 through 2019 by increasing the number of claims subject to the revised rules of engagement.
  • The Rapid Cash Build-up program that favorably impacts the financial stability of the Florida Hurricane Catastrophe Fund (FHCF) adversely impacts the financial stability of the fine insurers that FHCF reinsurers.

Although Florida’s 2019 legislative session made progress to reverse the trajectory of claims associated with assignment of benefits, the 2020 session has seen several bills stall: