United Insurance Holdings Corp. (UPC Insurance), a property and casualty insurance holding company, has formed Journey Insurance Co. in partnership with Tokio Marine Kiln.
The new property and casualty insurer will initially focus on offering homeowners and commercial residential property insurance in Florida, Texas and South Carolina.
Journey Insurance Co. is 66.7 percent owned by UIHC and 33.3 percent by R.J. Kiln & Co. (No. 3) Ltd., a subsidiary of Tokio Marine Kiln Group Limited (TMK). TMK is an affiliate of the Tokio Marine Group, a global insurance group established in 1879 operating in 38 countries and regions with over 38,000 employees worldwide and carries an “A++” rating from A.M. Best.
On Sept. 20, Journey Insurance Co. received an “A-” Financial Strength Rating and “a-” Issuer Credit Rating from A.M. Best with a stable outlook. According to Best, the assigned ratings reflect Journey’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). The expected level of risk-adjusted capitalization supports the underwriting, credit and investment risks of the company, Best said. It noted that while strict risk selection criteria and underwriting guidelines are in place for the states it plans to initially write in, the concentration of property business and corresponding dependence on reinsurance are significant risk factors. Although untested, sophisticated pricing is in place to support profitable growth, Best said.
The ratings agency added that the ratings and outlooks consider the substantial support and proven track record of United.
“Accordingly, the successful execution of Journey’s business development plans is dependent on its strategic business partners, including an external managing general agent (MGA) for commercial risks. Additionally, these ratings reflect Journey’s comprehensive reinsurance program, which is designed to provide horizontal and vertical protection against severe weather-related events. Based on management’s near-term financial plan, the projected net probable maximum loss comprises a modest amount of surplus,” Best said.
Future positive rating actions could occur for Journey following demonstrated successful implementation of its business plans, as well as several periods of profitable results that compare favorably to composite averages. Negative rating actions could result if the operational and financial plans anticipated by management do not materialize and result in a decline in risk-adjusted capitalization. In addition, negative rating action also could occur if the relationship or support provided by the majority parent undergoes a material change, Best said.
Journey Insurance Co. has also received regulatory approval from the Florida Office of Insurance Regulation for licensure as a Florida domiciled property and casualty insurance company.
“Journey marks the fifth insurance company in the UPC family, and the first one to be rated by A.M. Best,” said John Forney, president & CEO of UPC Insurance.
Forney added that Journey gives UPC a new way to grow its business in key markets by serving customers and distribution channels it previously could not reach. The new company will be working with independent agents and brokers.
Founded in 1999, St. Petersburg, Fla.-headquartered UPC Insurance is an insurance holding company that sources, writes and services personal and commercial residential property and casualty insurance policies using a group of wholly owned insurance subsidiaries through a variety of distribution channels. It currently writes policies in Connecticut, Florida, Georgia, Hawaii, Louisiana, Massachusetts, New Jersey, New York, North Carolina, Rhode Island, South Carolina and Texas, and is licensed to write in Alabama, Delaware, Maryland, Mississippi, New Hampshire, and Virginia.
Source: UPC Insurance, A.M. Best
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