Like Lex or GeoVera? I know that there is concern about AIG, but they are still better capitalized than these demotech rated carriers. I think there are some other admitted carriers that are best rated (isn’t ASI?).
So let’s get this straight. Potentially 20% of the current Florida based domestic market will be downgraded and others are looking to reduce exposure. Based on Demotech’s memo dated 3/18/09, 15 carriers are looking to reduce exposure in the state of Florida. Combine these carriers represent 50% of the domestic market.
Am I the only one concerned about this issue??? Granted these 25 carriers might only insure 100k homes in the state but the bigger problem is Kevin McCarty and Gov Crist were counting on these carriers to write the 1 million people being dropped by State Farm. The people of Florida need to wake up and smell the stench coming out of Tallahassee.
While I think it is reasonable that Demotech is finally looking at some downgrades, I don’t see them as a credible source of actuarial or rating data. I think they’d give my daughter’s piggy bank at least a B+. Case in point – in February, someone from Argus contacted our agency and was very proud of their A rating from Demotech. I pulled up Best’s immediately, and imagine my surprise when I saw a C-. Not just a C, but a C-. What competent, sane agent would ever place business with a C- company, regardless of what Demotech has to say?
Lets see, So we cant pay our reinsurance coverage to domestic carriers and we are so proud that these carriers who cannot afford private market reinsurance or have enough surplus have set up financing to get through 6 months of no payments from their coverage. Hmmmmm maybe they will wait 18 months instead? or maybe they never will have to wait until Obama can convince congress to pay for Florida’s hurricane. By the way you can get any rating you want from Demotech by paying them. enough. Lets read again what demotech stated.
Florida’s domestic carriers have responded to the concern. Petrelli explains:
“So, basically, they’ve gone to a lender, they’ve gone to a third party, and they’ve indicated, ‘We’ve got millions of dollars of exposure. The Florida Hurricane Catastrophe Fund is our reinsurer. It’s got this post-funding capability. And there’s a possibility we may not get that money in a timely manner, and we’re going to need to borrow some of it.'”
He said carriers have taken different routes. Some have secured the contingency financing with their receivables, while others are using their holding company assets or a corporate resolution authorizing a loan from the holding company if the FHCF monies do not show in a timely manner.
THIS UNCERTAINTY WOULD NOT BE ACCEPTABLE TO ANY OTHER CARRIERS OPERATING ELSEWHERE. IT IS LAUGHABLE IF IT WERE NOT SO SERIOUS.
Demotechs’ ratings are accepted by Fannie Mae and Freddie Mac when they sell mortgages to the secondary mortgage marketplace. Now that certainly makes me comfortable!
I wouldnt insure my shed with one of these Florida based carriers!
I dont live in Florida but, what are you guys down there thinking? Where is your agents association? Your insurance commissioner? Is there anyone protecting the consumer down there from these companies writing coverage and taking your premiums, then going insolvent in the case of a hurricane? I think the agents of Florida should demand better financial scrutiny of the carriers writing coverage in a catastrophy prone area such as Florida, or we all will be pay for your loses. I for one do not feel that is fair to the rest of the country.
While I am an agent and understand that Demotech doesn’t have a rating lower than an “A”, what are we to do? When no other carrier will write coverage, who do we insure our homes with? To me it’s a catch-22. You’re damned if you do, damned if you don’t. Just frustrating!!!
Sam, you are so right. We need to get other quality carriers with adequate surplus and private reinsurance in place that can handle a cat 4 or 5 hurricane hiting a populated city in Florida. There are agents who believe that these carriers are good for the florida insurance market. It astounds me to know these same agents are advising clients.
WE NEED A SOLUTION TO THE FLORIDA INSURANCE MARKET NOW! BEFORE A STORM!
Give me a break company gal, These carriers will all be on life support if a storm hits florida. ASI is rated but their rates suck and they and Tower hill are the only carriers writing who are TRYING to plan on being here after a storm. The others are just taking your premiums and plan on transfering all profits to their holding company/TPA and after a storm folding tent and handing the bill to FIGA. All this with the approval of Crist and McCarty because they need insurance carriers to write without regards to their ability to pay right now. It is political and disgusting to know that our politicians are playing with the financial solvency of our State. One big storm and our state is bankrupt and not able to get anyone to write a new policy.
Huh – The non-admitted carriers were here before and after the 04-05 seasons, maintain their Best A ratings because they buy reinsurance. Why do you assume they won’t be around? Lex for high values GeoVera for low values. I’m not getting why this isn’t a viable alternative to carriers participating in the FIGA.
Most of the non-admitted carriers i deal with are smart enough not to offer wind coverage in FL, or else they have a small band down the center of the state that they will accept.
Thanks for at least responding George – Those two comapnies do write throughout FL. There could be others, I’m not sure. I’m just trying to figure out why those companies are never mentioned.
Probably because the ones who will offer wind in florida are trying to get an appropriate rate. They need $2 per hundred, but nobody wants to take that because they can get Citizens or one of the startups to take it for 1/3 of that. It’s a nice little catch-22.
Like Lex or GeoVera? I know that there is concern about AIG, but they are still better capitalized than these demotech rated carriers. I think there are some other admitted carriers that are best rated (isn’t ASI?).
Demotech gives every company an A rating. They still gave Coral an A during the liquidation.
Weiss ratings is more accurate and should be the stand alone when it comes to rating insurers.
So let’s get this straight. Potentially 20% of the current Florida based domestic market will be downgraded and others are looking to reduce exposure. Based on Demotech’s memo dated 3/18/09, 15 carriers are looking to reduce exposure in the state of Florida. Combine these carriers represent 50% of the domestic market.
Am I the only one concerned about this issue??? Granted these 25 carriers might only insure 100k homes in the state but the bigger problem is Kevin McCarty and Gov Crist were counting on these carriers to write the 1 million people being dropped by State Farm. The people of Florida need to wake up and smell the stench coming out of Tallahassee.
While I think it is reasonable that Demotech is finally looking at some downgrades, I don’t see them as a credible source of actuarial or rating data. I think they’d give my daughter’s piggy bank at least a B+. Case in point – in February, someone from Argus contacted our agency and was very proud of their A rating from Demotech. I pulled up Best’s immediately, and imagine my surprise when I saw a C-. Not just a C, but a C-. What competent, sane agent would ever place business with a C- company, regardless of what Demotech has to say?
Lets see, So we cant pay our reinsurance coverage to domestic carriers and we are so proud that these carriers who cannot afford private market reinsurance or have enough surplus have set up financing to get through 6 months of no payments from their coverage. Hmmmmm maybe they will wait 18 months instead? or maybe they never will have to wait until Obama can convince congress to pay for Florida’s hurricane. By the way you can get any rating you want from Demotech by paying them. enough. Lets read again what demotech stated.
Florida’s domestic carriers have responded to the concern. Petrelli explains:
“So, basically, they’ve gone to a lender, they’ve gone to a third party, and they’ve indicated, ‘We’ve got millions of dollars of exposure. The Florida Hurricane Catastrophe Fund is our reinsurer. It’s got this post-funding capability. And there’s a possibility we may not get that money in a timely manner, and we’re going to need to borrow some of it.'”
He said carriers have taken different routes. Some have secured the contingency financing with their receivables, while others are using their holding company assets or a corporate resolution authorizing a loan from the holding company if the FHCF monies do not show in a timely manner.
THIS UNCERTAINTY WOULD NOT BE ACCEPTABLE TO ANY OTHER CARRIERS OPERATING ELSEWHERE. IT IS LAUGHABLE IF IT WERE NOT SO SERIOUS.
Demotechs’ ratings are accepted by Fannie Mae and Freddie Mac when they sell mortgages to the secondary mortgage marketplace. Now that certainly makes me comfortable!
I wouldnt insure my shed with one of these Florida based carriers!
I dont live in Florida but, what are you guys down there thinking? Where is your agents association? Your insurance commissioner? Is there anyone protecting the consumer down there from these companies writing coverage and taking your premiums, then going insolvent in the case of a hurricane? I think the agents of Florida should demand better financial scrutiny of the carriers writing coverage in a catastrophy prone area such as Florida, or we all will be pay for your loses. I for one do not feel that is fair to the rest of the country.
While I am an agent and understand that Demotech doesn’t have a rating lower than an “A”, what are we to do? When no other carrier will write coverage, who do we insure our homes with? To me it’s a catch-22. You’re damned if you do, damned if you don’t. Just frustrating!!!
Sam, you are so right. We need to get other quality carriers with adequate surplus and private reinsurance in place that can handle a cat 4 or 5 hurricane hiting a populated city in Florida. There are agents who believe that these carriers are good for the florida insurance market. It astounds me to know these same agents are advising clients.
WE NEED A SOLUTION TO THE FLORIDA INSURANCE MARKET NOW! BEFORE A STORM!
Give me a break company gal, These carriers will all be on life support if a storm hits florida. ASI is rated but their rates suck and they and Tower hill are the only carriers writing who are TRYING to plan on being here after a storm. The others are just taking your premiums and plan on transfering all profits to their holding company/TPA and after a storm folding tent and handing the bill to FIGA. All this with the approval of Crist and McCarty because they need insurance carriers to write without regards to their ability to pay right now. It is political and disgusting to know that our politicians are playing with the financial solvency of our State. One big storm and our state is bankrupt and not able to get anyone to write a new policy.
Huh – The non-admitted carriers were here before and after the 04-05 seasons, maintain their Best A ratings because they buy reinsurance. Why do you assume they won’t be around? Lex for high values GeoVera for low values. I’m not getting why this isn’t a viable alternative to carriers participating in the FIGA.
Most of the non-admitted carriers i deal with are smart enough not to offer wind coverage in FL, or else they have a small band down the center of the state that they will accept.
Thanks for at least responding George – Those two comapnies do write throughout FL. There could be others, I’m not sure. I’m just trying to figure out why those companies are never mentioned.
Probably because the ones who will offer wind in florida are trying to get an appropriate rate. They need $2 per hundred, but nobody wants to take that because they can get Citizens or one of the startups to take it for 1/3 of that. It’s a nice little catch-22.