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Downgrades are expected to be announced next week for some Florida carriers that are “already winding down”.
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The ratings were withdrawn after the reports for the full-year 2021 fell short of requirements to maintain it, Joseph Petrelli, president at Demotech said.
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The move will leave nearly 8,000 affluent customers without coverage and unable to turn to state-backed insurer Citizens Property Insurance.
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The agency linked the downgrade to the group’s 28% surplus decline in 2021 from the prior year and a total decline of 35% over the last five years.
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The firm says that, without change, firms will be downgraded in the coming weeks.
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New litigated claims were down 11% from January, when lawsuits had spiked.
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Ceded premiums earned were also up by 27.7% due to new quota share agreements.
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By failing to pass plans for new roof damage deductible, Citizens Property policy reductions, Florida lawmakers left property insurance reforms in limbo.
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Exposure management is prevalent and underwriting profitability is patchy.
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The Florida Senate passed Senate bill SB 1728 last Thursday, but it seems to have stalled in the state’s House of Representatives.
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The company’s convertible notes now have $24mn outstanding.
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Reciprocal carriers could become more popular, but while this could better serve capital providers it does nothing to address underlying problems.