The Florida property insurance coverage market is exhibiting extra indicators of bother, with one of many state’s largest carriers deciding to cease writing new house owner enterprise within the state – whereas additionally asking for a charge enhance on some insurance policies.
United Property and Casualty Insurance coverage Co., which has ranked within the prime 10 owners insurers in Florida with greater than 180,000 policyholders, stopped writing new insurance policies in Florida on Jan. 1, in accordance with a memo the service despatched to brokers.
“Following the unprecedented 2020 storm season, the numerous enhance in reinsurance value, and the worsening litigation developments inside lots of our markets, UPC has made the troublesome resolution to droop new enterprise with efficient dates of January 1, 2022 and later,” for HO-3, owners; for HO-6, condominiums; and for DP-3, dwelling hearth for rental or non-owner-occupied properties, reads the bulletin.
The bulletin was despatched final November, however phrase has solely lately unfold throughout the Florida insurance coverage panorama. The information comes arduous on the heels of two different carriers, Florida Farm Bureau and TypTap Insurance coverage, revealing they might cease writing new owners and dwelling hearth insurance policies within the state.
Some state officers and trade advocates have stated the pull-backs, together with main charge enhance requests from different insurers, are the most recent indications that Florida’s insurance coverage disaster could also be worsening, probably resulting in a market with solely a handful of carriers left standing in years to come back.
“All of those corporations suspending writing must be the canary within the coal mine for lawmakers,” stated William Stander, director of the Florida Property and Casualty Affiliation.
Officers with the St. Petersburg-based United couldn’t be reached for remark. However a submitting made with the state Workplace of Insurance coverage Regulation final month reveals that the service can also be asking for a 22.6% general enhance on its Guardian program for DP-3 insurance policies, efficient March 1, 2022 for brand new enterprise, and April 1 for renewals.
UPC blamed hurricane losses, increased loss-adjustment bills and reinsurance prices for the speed hike.
“There was a cloth shift in late declare reporting patterns stemming from climate occasions within the final six years,” UPC wrote in an explanatory memo filed with OIR. “As such, we consider the newer expertise finest represents what we count on to happen transferring ahead.”
The latest steps look like half of a bigger technique for United. In December, the corporate introduced it had agreed to promote UPC’s private strains in Georgia, North Carolina and South Carolina to HCI Group Inc. The transaction will allow UPC “to reallocate capital from its private strains portfolio to its quick rising industrial specialty property portfolio, which is underwritten by American Coastal Insurance coverage Firm,” United stated in a press release.
American Coastal can also be transferring to stem potential losses. A condominium in Bradenton Seaside, south of Tampa, reported in November that American Coastal stated it might not renew the condominium’s property protection late final yr as a result of the roofs had been 13 years previous. That compelled the condominium complicated to hunt new protection, which ended up costing about 42% extra in premiums, in accordance with a Bradenton newspaper report.
Most carriers which have suspended or diminished writing have been tight-lipped about their plans. Some have tried to place a constructive spin on issues. TypTap, based in 2016, introduced in November it might make an preliminary public providing in 2022. However in January, the corporate postponed the IPO as a result of present market pricing “doesn’t precisely mirror TypTap’s worth.”
Then, in late January, TypTap despatched a memo to Florida brokers: “TypTap skilled unprecedented development in 2021. We credit score our brokers with this success,” the bulletin reads. “Because of this development, we’re pausing our Owners (HO-3) new enterprise for all the state of Florida efficient February 28, 2022.”
Folks’s Belief Insurance coverage, based mostly in Deerfield Seaside, introduced final week that eight south and central Florida counties would stay closed for brand new enterprise.
Others are pushing forward with charge will increase. Common North America, for instance, introduced a 14.9% charge enhance for HO-3, HO-6 and DP-3 insurance policies, efficient Feb. 22, in accordance with a bulletin despatched to brokers.
Insurance coverage brokers and carriers have urged lawmakers to make additional reforms that would assist stem losses and scale back litigation. A variety of payments have been transferring slowly by way of the Legislature, now in its fifth week. One which insurers have stated would have the largest affect is SB 1728, which, amongst different adjustments, would enable carriers to put in writing extra house owner insurance policies that cowl solely the precise money worth of roofs, not the complete alternative value.
The Senate Banking and Insurance coverage Committee accredited the measure final week.