President


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 Calle Financial, 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 them.

Floridians are on alert as the state heads into peak hurricane season after three straight years of being impacted by major storms.

Meanwhile, the Florida Panhandle continues its recovery from Hurricane Michael that devastated the region as a Category 5 last October. Residents in the area are crossing their fingers that they will be spared this year as they continue rebuilding from the largest hurricane to hit the area on record

“We are all hoping there won’t be another one this year,” said Karen Kirkland, owner of Kirkland Insurance Agency in Lynn Haven, Fla., a part of the Panhandle that was badly damaged by the massive storm that made landfall October 10 with 155-mph winds.

According to the Florida Office of Insurance Regulation, total estimated insured losses from Hurricane Michael had reached $6.6 billion as of June 28, 2019, with 84% of claims closed. The total number of claims between residential, commercial, flood and other lines was nearly 148,000 — 88,692 of which came from Bay County.

“No one is coming to tell me they had too much insurance for Hurricane Michael”
Please enjoy the full article below

Please call  Lee from L & S Insurance, Inc. 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 them,

The U.S. Treasury today issued final regulations and other guidance on a provision of the Tax Cuts and Jobs Act that allows owners of sole proprietorships, partnerships, trusts, and S corporations to deduct up to 20 percent of their qualified business income on their taxes.

Today’s final rules cleared up lingering doubts about whether insurance agents qualify for the full 20 percent deduction for their 2018 taxes and for years going forward until 2025 under President Donald Trump’s tax law. They do qualify.

Please enjoy the full article below;

https://www.insurancejournal.com/news/national/2019/01/18/515313.htm

Please call Lee at Acentria Insurance at 954-351-1960 for free quotes on Home, Insurance, Flood, Private Flood, Car and Auto Insurance, Business & Commercial polices & Life & financial as well as group benefits. I will refer to our best agents around the state of Florida.

 

New NFIP Re-authorization Deadline Holds:   December 8, 2017

 

Despite the recent flood events, it seems that the NFIP re-authorization will likely not occur in time for the Dec. 8 deadline with another short term extension likely.  The good news is that the Disaster Relief proposed by the Administration has forgiven $16 B in NFIP debt and the focus would indicate that it is unlikely that a lapse of the NFIP will occur.

NFIP Debt Forgiveness & the Trump Administration

 

The NFIP’s debt will drop to approximately $14.5B and offer enough available borrowing authority to pay all outstanding claims due to yesterday’s passage of a Disaster Relief Spending bill proposed by the Trump Administration and sent to the President for signature.

 

The Administration’s disaster spending proposal, including 16 B in NFIP debt forgiveness, came with 15 proposed NFIP reforms which could complicate any future NFIP re-authorization discussions.

 

While Wright Flood continues to work to oppose eliminating access to the NFIP for any property unable to find coverage in the private market, we do support proposed reforms that strengthen the development of a private flood insurance market.

What Does it All Mean for NFIP Re-authorization

 

While Congress remains engaged with NFIP re-authorization and reform

issues, Wright Flood looks to take advantage of the additional time afforded by the short term re-authorization to continue the push for our combined priorities including:

  • Long term, prompt NFIP re-authorization;
  • Fair, business driven compensation for WYO insurers and our insurance producer partners;
  • An even playing field to allow private insurers the opportunity to further develop a private market for flood insurance;
  • The ongoing financial stability of a robust NFIP

Please keep in touch and be on call should we need your political action and support during this process.  In the coming weeks, Members of Congress will be visiting areas impacted by Harvey and Irma.  If you see or gain access to any Member of Congress, make certain they understand the importance of long term NFIP re-authorization for the communities you serve and for you as a business in those communities. 

 

The House and Senate in Washington D.C. are ready to put this old bill(Biggert – Waters) behind us. This was a bill that was hard fought and passed in 2012, when almost no bills were passed so this was purely political in nature for sure. In the meantime, the President will sign it and make Flood Insurance easier for a while, but in 3-4  years the problem will resurface for sure. In Tallahassee, our Legislators will also pass the Private Flood bill so Flood Insurance should not be as much of an issue like it would have been for many in Fort Lauderdale, Tarpon Springs and all over Florida. Please read the full article below and please call L & S Insurance at 1-888-244-7400 for quotes on Home, Flood, Auto, Business & Commercial, and Life & Financial products as well.

http://www.insurancejournal.com/news/national/2014/03/16/323451.htm

 

Now the House and Senate have approved and President Obama will soon sign it into Law. This will basically put everything back the way it was before October 1st 2013. Fort Lauderdale, South Florida, Tarpon Springs Tampa, and all of Florida will be in a better situation for at least 3-4 more years until the 5 years is up from the Original Biggert-Waters bill. The following changes will occur;

Anyone who was charged more will be getting refunds.

Subsidized rates will again be allowed we hope.

The 25 Billion dollar deficit will remain unchecked till another solution is found.

Rate Hikes will be capped off at 15-18% per year.

And Grandfather clauses will be maintained till July of 2017 when a new bill must be reached and agreed upon.

Please enjoy the full article below and please call L & S Insurance at 1-888-244-7400 for quotes on Home, Flood, Auto, Business & Commercial, and Life & Financial products as well.

http://www.insurancejournal.com/news/national/2014/03/13/323273.htm

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