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May 31, 2011
The following article was published in the South Florida Business Journal on May 31, 2011:
Weiss Gives Low Ratings to 29 Florida Property Insurers
Jupiter-based Weiss Ratings gave 29 Florida property and casualty insurers low financial strength ratings based on their year-end condition.
That means nearly 24 percent of the state’s private insurers got a “D” or “E” rating and are in danger of getting wiped out by major storms in their coverage areas. The largest property insurer in Florida is the state-run Citizens Property Insurance Corp., which is backed by Florida taxpayers.
State Farm Florida Insurance Co., the second-largest insurer with $888 million in homeowner premiums, received a “D” rating from Weiss. It lost $66.2 million in 2010.
Fort Lauderdale-based Universal Property and Casualty Insurance, was the third-largest insurer, with $507 million in homeowner premiums. After losing $9.9 million in 2010, the company was given an “E+” rating from Weiss.
Florida law requires that property and casualty insurers maintain at least $5 million in capital and surplus, regardless of the size of the company.
As of Dec. 31, Tampa-based Homewise Preferred Insurance Co. and St. Petersburg-based Edison Insurance Co. were the only companies below the $5 million capital requirement.
Weiss Ratings senior financial analyst Gavin Magor said the property insurance reform recently approved by the state has the capital requirement set to increase to $10 million in July 2016 and $15 million in July 2021. However, he noted that new insurance companies must meet the $15 million capital requirement before they are established.