State Farm Florida is the third largest property insurance company in Florida, by number of policies. It’s a fact that the Florida branch of the national insurer hasn’t wanted you to know for the past eight years.
State-owned Citizens Property Insurance Corp., the so-called “insurer of last resort,” is again Florida’s largest property insurer. And Fort Lauderdale-based Universal Property and Casualty is number two.
The market shares of the three companies in Florida were revealed in the Florida Office of Insurance Regulation’s recent release of the policy tally of the 126 state-regulated property insurers – the first comprehensive list made public since 2014.
Public publication of the list of market shares was mandated in a package of insurance reforms enacted in a special legislative session last May. The reform project eliminated a “trade secret” exemption that State Farm Florida and other major insurers had been invoking since 2014, which prevented the public from getting a full picture of how Florida insurers carve up the state’s residential market.
Under the new law, insurers can still block publication of their policy counts for each of Florida’s 67 counties.
But they are required to provide quarterly updates of the total number of policies covered, added, canceled and non-renewed statewide. In December, the Office of Insurance Regulation posted those details on its website for the third quarter of 2022. Fourth quarter data will be released around mid-March, according to a spokeswoman for the office.
The publication of the list compares market shares in 2022 with those of ten years ago, when the number of policies for each company was still made public.
A comparison by the South Florida Sun Sentinel shows the latest list is significantly different from 2012, a year the industry faced high sinkhole claim costs while the private market was still recovering from a barrage of hurricanes that hit Florida in 2004 and 2005, and as the state was just beginning its efforts to shift citizen policies to newly created “take-out companies.”
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Notably, the 2022 list misses 32 companies that were on the 2012 list, but it includes 42 companies that were not doing business in the state in 2012.
Still, some rankings remain the same, including Citizens, Universal Property & Casualty, and State Farm Florida as the state’s top three insurers.
Lawmakers decided to require the release of full data because the number of companies claiming “trade secrets” made it difficult for even the legislature to analyze the private market during debates over insurance bills, a said Paul Handerhan, president of the Florida-based Federal Association. for Insurance Reform (FAIR).
“Each year there would be presentations by the Bureau [of Insurance Regulation] in the Legislative Assembly, it would be incomplete,” Handerhan said.
Requiring the publication of the full list is “a good thing”, he said, even if it mainly benefits analysts and groups like FAIR who can use the data to make policy recommendations.
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Consumers can use the data to determine which companies are adding policies — usually an indicator that they’re financially stable enough to take on more risk, he said. On the other hand, if the data shows that a company has significantly reduced its number of policies, it could indicate that the company has been forced to reduce its exposure because its capital available for the payment of claims is decreasing, a- he declared.
Mark Friedlander, director of corporate communications at the non-profit Insurance Information Institute, which is funded by national insurance companies, cautioned against drawing conclusions about companies solely by comparing changes in their number of policies at 10-year intervals.
“I’ve seen many insurers grow their policy count year over year, but run an underwriting loss and negative net income,” Friedlander said by email. “Positive premium growth is not necessarily synonymous with financial stability. It is one of many measures of a company’s health. You should also look at a company’s combined ratio (measure of underwriting profit), growth in surplus (capital), and loss rate.
He cited the comparison over a decade of the number of citizens’ policies. Unlike private market companies, when the number of citizen policies increases, it is a sign that the overall insurance market is weakening, as customers can only qualify if they cannot find an insurer. from the private market at an affordable price.
But simply comparing the numbers a decade apart shows that citizens had 363,695 fewer politicians in 2022 compared to 1.43 million a decade earlier – which, on the face of it, could be seen as a positive sign.
What the comparison doesn’t show is that Citizens had reduced its font count by more than a million after 2012 and fell to around 420,000 in 2019 – dropping it below Universal – before climbing back up to 1.07 million policies in the third quarter of 2022.
The recent growth of citizens has come under intense scrutiny from lawmakers and industry watchdogs who are concerned that insurance consumers across the state will be forced to pay special assessments if a citizen outsized is unable to pay claims after a series of catastrophic storms. Several reforms have been passed over the past year to increase premiums and make the company less attractive than its competitors in the private market.
Universal added 76,681 fonts compared to 2012 and with 629,229 is back in second place behind Citizens. Asked to comment on the reason for the sharp increase, spokesman Travis Miller said via email: “It is difficult to make generalizations about data points 10 years apart, especially when many important factors have influenced the Florida residential real estate market at various times during this period. »
Nonetheless, Miller said, “the information reflects the consistency of [Universal’s] efforts to be the first choice of consumers and agents for their home insurance needs.
State Farm Florida, a company spun off from parent State Farm after Hurricane Andrew hit in 1992, grew by 160,152 policies since 2012 to remain firmly in third place with 558,604 policies.
In 2014, State Farm Florida was the first major insurer to claim a “trade secret” exemption to prevent the publication of its county-level police data via a searchable database available on the Office of Insurance Regulation. In court filings, the company said the data gave competitors an unfair advantage by revealing where State Farm Florida’s business was concentrated.
The company’s right to claim trade secrecy over the data was upheld in 2017 following a three-year court battle with the Office of Insurance Regulation. After State Farm’s victory, 21 other insurers followed suit, declaring their own secret data.
In addition to blocking the public release of county-level data from these companies, the Office of Insurance Regulation has also omitted their state-level data from market share reports posted on its website.
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Commenting on its number three ranking, as shown by recently released statewide data, State Farm Florida spokesperson Roszell Gadson said, “State Farm continues to maintain financial strength to be there for our Florida customers. We pride ourselves on being able to deliver on the promises we’ve made to be there when they need us most.
The comparison shows that 32 companies have left the Florida market since 2012, either through bankruptcy, merger with another company, acquisitions or loss of appetite to insure Florida risks. Notable failures included St. Johns Insurance Co., the fourth-largest provider of personal residential policies in 2012, with 175,279 policies. It went into liquidation in February 2022.
Other bankrupt companies not on the 2022 list are Southern Fidelity (76,624 policies in 2012), Universal Insurance Company of North America (70,393) and FedNat (57,637).
But the comparison also shows that 42 companies entered the state since 2012, and not all started before the industry’s fortunes began to deteriorate in 2017.
Companies on the 2022 list that were not in business in 2012 include Heritage Property & Casualty (No. 9), a publicly traded company that was set up with take-out Citizens customers from 2013. Heritage is increased to 247,000 policies in 2015, but reduced to 175,869 by 2022.
Other newcomers include No. 16 Kin Interinsurance Network, a company created by tech entrepreneurs that relies on publicly available data to set home prices in risky states such as Florida, Georgia , North Carolina and Oklahoma. After debuting in Florida in 2017, Kin had 102,998 policies in 2022 and was the 16th largest home insurer in the state.
Similarly, Slide Insurance Company, a Tampa-based firm founded in February 2022 by former Heritage CEO Bruce Lucas, rose to No. 17 after the company agreed to acquire up to 147,000 policies left stranded by the failure of St. Johns.
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A decade without hurricanes allowed many private market companies to increase their profits and market share, but this trend ended for most as of 2017. This is the year that Hurricane Irma entered South Florida and swept north affecting all 67 counties and causing approximately $50. billion damage.
It was also the year after a Florida Supreme Court ruling made it easier for policyholders to sue and collect damages from their insurers. The ruling and return of destructive hurricanes in the years that followed has caused many insurance companies to go bankrupt or leave the state since 2017.
In some cases, the policy count increases evident in the comparison between 2012 and 2022 mostly occurred before 2017. Some companies peaked before 2017 and have declined or remained flat since then, and this turn of fortune does not is not apparent in the 10-year comparison.
Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071, on Twitter @ronhurtibise or by email at [email protected].