According to recent news reports, the number of troubled property and casualty insurers in Florida is growing.
Thirty Five (35) insurers in Florida were given a grade of D or F. That is up from 29 with poor grades on December 31. And one of those companies – Argus Fire and Casualty Insurance Company – has since closed its doors for business by Florida regulators.
Surprisingly, State Farm Florida Insurance Company had a D rating. It is surprising because State Farm is one of the largest insurers in the State of Florida. Also, and despite not having a storm hit Florida in over 5 years, and having $221 million in net premiums, State Farm lost $27 million.
Universal Property & Casualty Insurance was the largest insurer rated E+. It had $18.1 million in net premiums in the second quarter and earned $3.4 million. Meanwhile, Sunshine State Insurance Company was the only insurer in Florida that earned an E rating.
On the other end of the spectrum, Citizens earned an A+ rating. American Family Home Insurance Company and American Strategic Insurance Co. each earned B+ ratings.
These figures are surprising since Florida has not experienced a direct hit by a hurricane in years, and Florida has dodged a major loss event in the past few years as well. Yet despite years of dodging a major hurricane, few insurance companies have managed to build up sizeable reserves.
It is very concerning that in the wake of record increases to homeowners’s insurance rates throughout the State of Florida, coupled with the lack of a significant event in the past several years, that so many insurance companies are still not financially healthy. Indeed, Allstate was requesting rate hikes in excess of 30%. Should Florida be hit with a major storm it may result in many insurance companies going out of business.
Additionally, the many changes that were recently passed into law with the promise of lowering insurance rates and strengthening the insurance companies have not come to fruition.
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