Service Insurance Company of Bradenton, Fla., hit with customer losses of more than $100 million in the four hurricanes that swept Florida in 2004, has received notice that it has been removed from A.M. Best’s rate review process and assigned an excellent rating with an outlook of “stable.” Service, in business since 1978, has maintained its A-excellent rating for 17 years.
As a result of the hurricanes last year, Service was impacted with four times more claims in a 45-day period than it usually receives in a year. Much of the insurance industry in Florida suffered severe losses in the storms. Service, however, has top-rated reinsurance and its net loss was only a fraction of the $100 million. Consequently, Service made a commitment to improve its position by increasing capital.
“With an infusion of capital, we now have adequate surplus and will maintain the rating we have enjoyed for more than 15 years,” John Weichel, founder and chairman of Service Insurance said. “We have plans to grow in the Florida market and have made a decision to increase our capital base to $12 million, which is more than the company has ever had.”
To accomplish the increase, the IAT Reinsurance Co. Ltd. joined the shareholder group of Service Insurance. IAT Reinsurance is headquartered in Bermuda with U.S. corporate operations in North Carolina, Illinois, Florida, California and Arizona. It has in excess of $800 million in capital.
“We believe the Florida marketplace offers greater long-term opportunity for profitable growth,” Weichel said. He added that Service has withdrawn from the North and South Carolina marketplace.
David Cruikshank, Service Insurance president and CEO, said Service recognizes the needs of policyholders in Florida and will devote more of its capacity to expand writings in the state.
“Service has a strong foundation and we are very optimistic about our future in responding not only to the needs of the Florida marketplace, but to our shareholders’ interests as well,” Cruikshank added.
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