Chaisteli Insurance


Please call  Lee from Calles Financial and Chaisteli Insurance  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.

If your carrier is experiencing 100% or more from claims last year, then expect huge rate hikes this year. Not counting Reinsurance hikes this summer, rates could jump 30-40% for the next 2 years!!! Do you need to shop your Insurance, Home, Auto, Life or Long Term Care, I can help you understand and shop rates, premiums, coverages or the lack thereof.

The long-awaited Demotech rating decisions for Florida domestic carriers are in, with many carriers having satisfied necessary steps to avoid ratings downgrades by the financial analysis firm.

After affirming a slew of companies in mid-March, Demotech announced April 2 that the remaining carriers that had yet to be decided were affirmed (see chart) because of enhancements to their business models

On March 30, Demotech affirmed the ‘A’ financial stability ratings of the following companies: Avatar Property & Casualty Insurance Co., Centauri Specialty Insurance Co., Cypress Property & Casualty, Safepoint Insurance Co., and Tower Hill Signature Insurance Co. Also affirmed were Tower Hill Select Insurance Co. and Omega Insurance Co., after their merger into Tower Hill Signature was approved by the Florida Office of Insurance Regulation on March 25.

Since Demotech sounded the alarm in January that as many as 18 Florida carriers could see downgrades due to deteriorating insurance market conditions in the state, the ratings firm said several actions have been taken: one company was downgraded, one company was acquired by a carrier with an FSR of A; five companies were merged into carriers with FSRs of A, and an additional nine companies enhanced their business models.

The specific actions include:

  • Anchor P&C Assigned an FSR of M – ceased operations
  • Anchor Specialty FSR of A – Acquired by insurer with FSR of A
  • Omega FSR of A – Merged into an insurer with FSR of A
  • Tower Hill Select FSR of A – Merged into an insurer with FSR of A
  • Cypress TX FSR of A – Merged into an insurer with FSR of A
  • Prepared FSR of A – Merged into an insurer with FSR of A

Demotech said other carriers “aggressively enhanced the capability of their business models to respond to the anticipated continuation of jurisdictional and weather-related challenges, the substantial increase in reinsurance costs during 2019, the likely increase in the cost of reinsurance in 2020, and the cost of the Rapid Cash Buildup Program of the Florida Hurricane Catastrophe Fund.”

Those companies include:

  • Centauri Specialty FSR of A, Business model enhanced
  • Centauri National FSR of A, Business model enhanced
  • Safepoint FSR of A, Business model enhanced
  • Gulfstream P&C FSR of A, Business model enhanced
  • Avatar P&C FSR of A, Business model enhanced
  • Capitol Preferred FSR of A, Business model enhanced
  • Security First FSR of A, Business model enhanced
  • Tower Hill Signature FSR of A, Business model enhanced
  • Cypress P&C FSR of A, Business model enhanced

“Our view of Florida’s current residential property insurance marketplace is that the numerous financial and market based criteria that affect Florida residential property insurance have never been more difficult for carriers to navigate since we first rated Florida focused carriers in 1996. The marketplace as well as carrier-specific financial metrics drove the need to consider downgrades,” Demotech said in an April 2 report on its ratings decisions.

The ratings firm said it asked certain Florida insurers to provide projections of their year-end 2019 financials immediately after it finished reviewing third quarter results in November last year. At that time, it also asked those insurers to answer two questions based on the following Florida-specific circumstances: 1. the lingering impact of the judicial activism of the past; 2. the litany of named weather events; 3. increases in the cost of reinsurance, and 4. the specter of additional increases in the cost of reinsurance in 2020.

The questions posed to companies were:

  • Will you continue to be focused on residential property insurance in Florida?
  • If so, based upon the conditions in the marketplace and the operating results that will emanate from those conditions, how will you revise your business model, or otherwise position your company, to combat more of those same conditions in the future?

Demotech said carrier responses used to make ratings decisions included documentation of the company’s jurisdictional diversification, voluntary runoff, marketing existing books of business to other carriers, merging affiliates, or securing assistance.

“The management teams of these carriers have fought the conditions in the most difficult operating jurisdiction in the country to a draw,” the Demotech statement says. “They have addressed the needs of policyholders, investigated and settled claims, paid their employees, producers, and reinsurers, met with us, negotiated with reinsurers for their 2020 programs, and filed timely financial statements in an orderly manner.”

Demotech said it reviewed public and private financial information of companies, including:

  • Managing general agency contract and financial statements, when necessary
  • Holding company financial statements, when necessary
  • Actuarial reports and documents containing appreciably more detail than the actuarial opinion letter, which is a public document
  • Independent audits
  • Anticipated operating results in the form of pro forma financials in a prescribed format
  • Claims adjusting details and reports
  • Litigation services
  • Asset and investment management contracts
  • Disaster recovery plan
  • Catastrophe response plans
  • Catastrophe modelling output
  • A preliminary review of horizontal and vertical reinsurance programs
  • A final review of horizontal and vertical reinsurance programs
  • Review of rate level indications
  • Personal financial statements of key financial supporters.
  • On-site meetings with reinsurers
  • On-site meetings with companies\

Please enjoy the full article below!!

https://www.insurancejournal.com/news/southeast/2020/04/03/563193.htm

Please call  Lee from Calles Financial and Chaisteli Insurance  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.

34 Florida carriers have 100% or more claims to revenue last year in 2019. Some are as high as 120% of revenue. AOB has caused this problem with no end in sight for rate hikes. Carriers will start to non renew their books of business, older homes, homes with water damage claims. This will hit the housing market & 1st time Homebuyers chances to buy homes will be even more less likely. There was supposed to be a special session about just Insurance in Tallassee in mId March, but now w/ the COVID-19 break out, that session may never happen this year. Everyone needs to understand their Home Insurance policies, coverages or lack their of.

If you want this full e-mail, please contact me at lee.gorodetsky@gmail.com

Here is the beginning of 12 pages of information and charts & graphs,

 

Demotech set to reveal downgrades as
full-year results show Florida pain
Demotech has affirmed the majority of the 46 Florida homeowners specialists it rates with the
remaining carriers awaiting their fate as the agency completes its review of 2019 financials
that reveal widespread operating losses and actions to shore up balance sheets, The Insurer
can Demotech is the only firm that rates most of the Florida specialists and its financial strength
ratings are critical to them because lenders typically require insurance policies bought by
homeowners in the state to be from A rated carriers.
As previously reported, in January this year the ratings agency warned of a potential slew of
downgrades in response to a range of macroeconomic and unique state specific issues faced
by Florida-focused carriers.
And analysis by this publication reveals 36 out of 46 companies we compiled data on from
2019 statutory annual statements fell to an operating loss in 2019. A total of 34 of the carriers
reported combined ratios of over 100, with 14 at over 120 percent.reveal.

 

 

Please call  Lee from Calles Financial and Chaisteli Insurance  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.

Here are the ones still in question. The bad ones. Will they be bought out or go out of business by the State Mandate next week. With Hurricane season coming and all the Covid 19 stuff happening, please don’t wait.

The companies that are still in discussions and will either be affirmed or downgraded, as of March 26, include: Avatar Property & Casualty Insurance Co., Centauri Specialty Insurance Co., Cypress Property & Casualty, Omega Insurance Co., Safepoint Insurance Co., Tower Hill Select Insurance Co., and Tower Hill Signature Insurance Co

Please enjoy the full article below;

https://www.insurancejournal.com/news/southeast/2020/03/27/562512.htm

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.

Lighthouse Property Insurance Corp. plans to acquire its sister carrier, Prepared Insurance Company (Prepared), from Prepared Holdings Group.

Lighthouse is a Louisiana-domiciled property and casualty insurance carrier authorized to write policies in Louisiana, Texas, North Carolina and South Carolina. Prepared is a Florida-domiciled property and casualty insurance carrier authorized to write in Florida and Louisiana. The acquisition and merger are subject to regulatory review and approval.

Please enjoy the full article below.

https://www.insurancejournal.com/news/southeast/2020/03/16/561139.htm

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:

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.

Auto and home insurer Windhaven Insurance has alerted its agents and employees in Florida that it is winding down the insurance operations of its entities, including Windhaven National Insurance Co., ClutchAnalytics and The Hearth Group, and that its assets are being foreclosed on by a lender intending to sell them.

Additionally, Windhaven National Insurance Co., a Texas-based private passenger auto insurer, is being placed into receivership by the Texas Department of Insurance.

These moves come less than two months after Florida officials placed the group’s non-standard auto insurer, Windhaven Insurance Co. (WIC), into receivership and began to liquidate that company.

Please enjoy the full article below;

https://www.insurancejournal.com/news/southeast/2020/02/27/559625.htm

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.

Not just Insurance carriers, but Reinsurance rates as well unless Tallahassee comes up with the Cat Fund solution I posted before the end of the regular session. There may also be a special Insurance session after!

It’s no surprise that Florida carriers are raising homeowners’ insurance rates given several years of catastrophes and losses from litigation related to assignment of benefits and water damage claims.

What may be surprising for insureds, however, is how substantial the increases to their premiums may be, particularly if current filings being evaluated by the Florida Office of Insurance Regulation are approved without modification

In rate hearings before OIR over the last two months, several Florida carriers explained their filings for rate increases ranging from more than 20% to nearly 40%. Since December, Edison Insurance Co., Capitol Preferred Insurance Co., and Velocity Risk Underwriters (on behalf of National Specialty Insurance Co.), have told regulators that these rate increases are needed for their companies to remain healthy.

“Unfortunately, times come that you have to do certain things to increase your rates and make sure your company stays viable and functional and healthy,” said Capitol Preferred President and CEO Jimmy Graganella at its Feb. 7 rate hearing. His company is seeking a 36.5% rate increase on one of its 14 insurance programs covering about 28,000 consumers in Florida.

Capitol Preferred is one of many insurers responding to deteriorating conditions in the Florida homeowners insurance market from a combination of AOB, water damage loss claims and several years of major hurricanes, as well as a what insurers call “loss creep” from those claims in recent months.

According to a June 2019 AM Best report, several carriers, including the top five publicly traded Florida insurers (United Insurance, FedNat, Heritage, Universal and Homeowners Choice) have reported adverse development related to Hurricane Irma, “considerably increasing ultimate loss estimates since impact,” Best said.

The report also noted claims from Hurricane Michael appear to be taking a “similar, though less severe, trajectory,” with several carriers increasing ultimate loss estimates as time passes.

These factors are being blamed for the need for higher insurance rates and a tightening of coverage in several regions of the state, particularly in South Florida.

Please enjoy the full article below!

https://www.insurancejournal.com/news/southeast/2020/02/25/559166.htm

 

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

Although the 2019 hurricane season did not have a significant impact on Florida, loss creep from prior storms continues to weigh on reinsurers, leading to a likely rise in rates for the upcoming June renewal period. As noted in AM Best’s The Florida Market: Bracing for the Next Big Event (June 28, 2019), the reinsurance market for Florida property underwriters saw an initial round of hardening during the June 2019 renewal season.

The reported loss creep has in part been influenced by social inflation in the Florida market, resulting in adverse development of prior year loss reserves stemming from an increase in loss frequency and severity. Despite the lack of hurricanes making landfall last fall, companies—particularly the smaller, Florida-dominant property writers with questionable balance sheet strength—remain more susceptible to prevailing market conditions, such as hardening reinsurance pricing and adverse claims trends. Based on market surveillance, reinsurance rates are likely to increase by 15%-20% for the June renewal period; companies that depend highly on reinsurance may be most impacted

Because of inherent hurricane risk, Florida property writers spend a considerable amount on reinsurance, given the need for prudent catastrophe reinsurance programs. As we stated in our June 2019 report, a number of challenging issues in Florida have made it necessary for carriers to remain nimble in strategy and proactively manage several forms of risk, with rising reinsurance costs potentially being the next event on the horizon. Rising reinsurance costs have the potential to pressure some of the more thinly capitalized Florida-specific companies in the market.

Exhibit1 lists the companies that have a direct Florida property book of at least $1 million, for which the Florida book constitutes at least 50% of the carrier’s total book, and unaffiliated ceded premium written constitutes at least 50% of gross premium written. (Unaffiliated ceded premium provides a better picture of private market participation.)

Reinsurance dependence, as measured by unaffiliated ceded written premium to policyholder’s surplus, exceeds 100% for all but four of the 25 companies listed, indicating elevated sensitivity to the changing reinsurance environment.

Companies with high reinsurance dependence face difficult choices. Higher reinsurance rates may pressure earnings if insurers decide to continue writing business at existing levels. Those opting to retain more business may see declines in capitalization in the event of catastrophic storms; these companies may be forced to write less business to maintain existing capital.

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

This will still be a band aid and could be a huge problem if the big storm actually hits Florida, but, we need the help now for rate relief!

Floridians currently pay the highest homeowner’s insurance rates in the nation, and no one should be surprised by this. Florida is a long relatively narrow large peninsula jutting out into bodies of warm water prone to tropical storms and hurricanes.

At the same time, we also have the most robust and competitive homeowner’s market of any state by far. This fierce competition keeps rates lower than they might be otherwise. As a consumer advocate, I have never been shy about stating that good market conditions create competition and innovation which benefits insurance consumers.

The last four years have not been good for the Florida homeowner’s insurance market. The impact is that the average policyholder will pay about $500 more per year to insure their homes—an average 25% rate increase on the median $2,000 a year policy.

What caused this? In the last four years, we have not only had several hurricanes after a 10-year respite, but also in each year we have had expensive non-hurricane events that have deteriorated insurance profits and claims reserves. Because of this, private reinsurance prices (this cost is about 40% of total premium collected) have sharply increased, and investment capital has dried up—tripling the cost of borrowing.

This situation is nothing new. Florida will always have good and bad cycles when it comes to the weather and insurance.

The good news is that elected representatives in Tallahassee have mechanisms that were put in place by their predecessors to mitigate the damage that would be caused by cyclical rate increases.

Legislative reforms during the current session could reduce this average rate increase by at least half, and could include:

  1. Repeal the rapid cash build-up factor for the Florida Hurricane Catastrophe Fund (FHCF). The Florida “Cat Fund” was designed to promote stability in the international reinsurance market. Years ago when the FHCF was depleted after eight hurricanes in two years, a 25% surcharge was placed on the price of reinsurance purchased through the fund to replenish cash in the fund so that it would have enough money to pay claims for a future rainy day. Today the FHCF has $13 billion of cash on hand to pay claims and will collect over $1 billion more this year. The total $14 billion is equal to all the claims paid by the FHCF in the 26 years since it was created. Repeal of this rainy-day surcharge would pass about $350 million back to insurance consumers and reduce the average rate increase by 20%.
  2. Allow the Cat Fund to offer an additional $4 billion in coverage through a temporary layer of reinsurance that would offer about $600 million in savings that again would be passed on to insurance consumers. Companies would be able to buy more reinsurance from the FHCF instead of the private market. This would also increase capacity and lower private reinsurance costs. This reform would reduce the average rate increase by another 40%.
  3. An additional and temporary measure that the legislature could take is to provide short-term loans that would replace existing debt. According to the rating agency Demotech, this reform (which has been employed by the legislature in the past) would allow at least six Florida-based carriers to provide their policyholders with lower rates. It would also help keep this market robust and competitive.
  4. We simply cannot ignore these expected rate increases. The Florida Legislature should use the existing policy levers to get in front of the problem.

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

Please enjoy the full link below.

https://myemail.constantcontact.com/NAIFA-Florida-Session-Dispatch-Week-3.html?soid=1118019259448&aid=52_cvHub5XU

Next Page »