A.M. Best Downgrades State Farm Florida; Outlook Negative
Southeast News • June 18, 2009
A.M. Best Co. has downgraded the financial strength rating to B (Fair) from B+ (Good) and issuer credit rating to "bb"
from "bbb-" of State Farm Florida Insurance Co.
The rating agency's ...
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Subject: RE: RE: RE: Downgrade - WCFL didn't read the fine print
Posted On: June 18, 2009, 3:45 pm CDT
Posted By: Arthro
Comment:
My point was this...you were saying that the bloggers who supported SF were shut up by this news release. But the reasons for the downgrade were understandable and expected - decreased revenues due to nonrenewals. The press release also said that the PML was significant but manageable due to the history of the parent company stepping in to bailout SF Florida and the reinsurance SF Florida purchased. Seemed to me that you were saying the world was falling apart for SF when it isn't. On the other hand, look at Argus and the questionable situtation for all Florida domestics who rely so heavily on the Cat Fund.
We agree on de-regulation - in a perfect world it should apply to all carriers. But Florida is not perfect and that's not going to happen overnight. For now, Florida has a desperate need to keep big capital in the state, and considering the obstacles we have here (Crist, McCarty, economy, housing, etc), this is a step in the right direction.
Crist contends that the system is working while almost everyone around him says there are huge problems ahead for Florida if we chase out all the big insurers and end up completely dependent on the Cat Fund and Florida domestics. The legislature knows this, that's why they slam dunked the approval. And That's why you've seen a tremendous amount of support for the bill from people who don't have a vested interest. If Crist vetoes, Florida falls off into a hole and it's all on his shoulders. If he signs, at least Florida has a chance and State Farm has a hard time explaining any further withdrawal.
I see a lot of independents complaining about how unfair this is, but I can't stop thinking that right now they are making out pretty well at the expense of Florida's State Farm agents. If this bill passes, they will make out better because I think a bunch of people today are going to look at the higher premium from State Farm and walk, even if they think State Farm is more stable. Todays' economic situation will force them to go elsewhere.
And...if you believe Crist and McCarty, State Farm has already been the highest priced insurer in the state for a long time. That means that a whole bunch of consumers have already chosen State Farm in spite of the fact that they are more expensive. But there is a point where they won't pay more for the greater sense of financial stability.
Subject: RE: RE: RE: Downgrade - WCFL didn't read the fine print
We agree on de-regulation - in a perfect world it should apply to all carriers. But Florida is not perfect and that's not going to happen overnight. For now, Florida has a desperate need to keep big capital in the state, and considering the obstacles we have here (Crist, McCarty, economy, housing, etc), this is a step in the right direction.
Crist contends that the system is working while almost everyone around him says there are huge problems ahead for Florida if we chase out all the big insurers and end up completely dependent on the Cat Fund and Florida domestics. The legislature knows this, that's why they slam dunked the approval. And That's why you've seen a tremendous amount of support for the bill from people who don't have a vested interest. If Crist vetoes, Florida falls off into a hole and it's all on his shoulders. If he signs, at least Florida has a chance and State Farm has a hard time explaining any further withdrawal.
I see a lot of independents complaining about how unfair this is, but I can't stop thinking that right now they are making out pretty well at the expense of Florida's State Farm agents. If this bill passes, they will make out better because I think a bunch of people today are going to look at the higher premium from State Farm and walk, even if they think State Farm is more stable. Todays' economic situation will force them to go elsewhere.
And...if you believe Crist and McCarty, State Farm has already been the highest priced insurer in the state for a long time. That means that a whole bunch of consumers have already chosen State Farm in spite of the fact that they are more expensive. But there is a point where they won't pay more for the greater sense of financial stability.