The Home Insurance Guru

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With Florida about to enter peak hurricane season, a state insurance association representing more than a dozen insurers in Florida is hitting back against a recent report from ratings agency Weiss Ratings that identified 10 Florida-based insurers as “weak.”

The insurer trade group, the Florida Property & Casualty Association (FPCA), is disputing the “weak” assessments by Weiss and defending the marketplace in general, saying it does not believe Weiss is a legitimate ratings agency

“Florida homeowners should beware of a recent press release by Weiss Ratings that contains misleading information about the financial stability of our state’s homeowner’s insurance companies. This is simply not the truth,” the Florida Property & Casualty Association (FPCA) said in a statement.

State insurance officials did not respond to individual ratings assertions by Weiss but did downplay the effect of open Hurricane Irma claims that Weiss cites as a concern.

Weiss Ratings has defended its assessments of the 10 insurers as weak, claiming other rating agencies give some insurers high ratings they don’t deserve.

In the June 14 press release that upset FPCA, Weiss highlighted what it called the 10 strongest and weakest providers of homeowners insurance doing business in Florida.

The ratings agency, which analyzes and rates 2,300 property and casualty insurers in the United States, said it uses annual and quarterly financial statements filed with state insurance commissioners to complete an analysis of hundreds of factors that are synthesized into a series of indexes that are then used to arrive at a company’s letter grade rating.

Based on this criteria, Weiss’s statement identified 10 carriers with more than $2.5 million in annual homeowners premiums in the state to which it gave a grade of D+ or lower, as of Dec. 31, 2017:

Weiss warned consumers to remain vigilant of these 10 insurers with “weaker finances,” which combined have more than $1.7 billion in homeowners premium in Florida.

FPCA, which represents 15 Florida insurers, including Edison Insurance and People’s Trust, disputed the Weiss ratings, saying in its release that Florida home insurers must pass a rigorous catastrophe reinsurance stress test by the Florida Office of Insurance Regulation (OIR), as well as vertical and horizontal reinsurance reviews by what it calls “credible rating agencies.”

FPCA alleges that Weiss Ratings opinions are “not recognized by the insurance industry because they fail to consider the rigorous reinsurance programs purchased by insurance carriers on an annual basis,” FPCA said.

“Our leadership of and members of the FPCA do not believe Weiss is a legitimate ratings agency. To the best of our knowledge, their ratings aren’t recognized by the secondary mortgage market and they don’t speak with the insurance companies they claim to rate. A.M. Best, S&P, Moody’s and Demotech all do,” said FPCA Chairman Roger Desjadon.

Each of the top 10 companies Weiss assigned low ratings to have Financial Stability Ratings (FSR) of ‘A’ or better by Ohio-based financial analysis firm Demotech, except one – White Pine Insurance Co., which is rated B+ by A.M. Best only. In addition to its ‘A’ rating from Demotech, Tower Hill Prime Insurance Co. also carries an A- rating from Best with a negative ratings implication, as of Sept. 2017. Best does not rate the other eight companies.

Please enjoy the full article below;

https://www.insurancejournal.com/news/southeast/2018/07/24/495836.htm