Some welcome good news from a pair of Florida property insurers after Hurricane Ian

by | Oct 12, 2022


  • Two Florida property insurers say they will have no trouble meeting their financial obligations in the wake of Hurricane Ian
  • The news comes on the heels of other insurers facing hardships in the months before the storm hit
  • The two companies, Universal Holdings and Homeowners Choice, detailed how they are helping homeowners with claims and said they can well positioned financially to absorb the losses

TALLAHASSEE — Two Florida property-insurance companies this week offered assurances about their financial health as they deal with thousands of claims from Hurricane Ian.

The parent companies of Universal Property and Casualty Insurance Co. and Homeowners Choice Property and Casualty Insurance Co. issued written and video statements as Florida’s troubled insurance industry faces widespread questions about its ability to pay claims after the Category 4 storm.

The chief executives of Universal Holdings, Inc., and HCI Group, Inc., the parent companies of Universal and Homeowners Choice, respectively, pointed to reinsurance — essentially backup coverage — that they had purchased earlier in the year to help handle hurricanes.

“We can sustain a much greater loss than Ian has dealt to us,” Paresh Patel, HCI’s chairman and chief executive officer, said in a video posted Monday on the Tampa-based company’s website.

Universal estimated an ultimate gross loss of $1 billion from the storm but said that was well below what is known as a “reinsurance tower,” which includes a combination of reinsurance coverages. Universal will be responsible, at least in part, for paying “retentions,” somewhat akin to deductibles on the reinsurance coverage.

“Our claims, catastrophe response and customer service teams are on the ground and on the phone, helping our policyholders in their time of need,” Stephen Donaghy, chief executive officer of Fort Lauderdale-based Universal Holdings, said in a statement Tuesday. ”With our dedicated staff, our disaster preparedness planning and conservative reinsurance program, we’re well prepared for this event and maintain substantial reinsurance protection for any subsequent events.”

Universal said it had received about 18,000 Ian claims, while Patel said Monday that HCI had received about 10,000 claims and expected 2,000 more. Patel cited an estimated net loss of $78 million for HCI, after reinsurance is taken into consideration.

Both publicly traded companies indicated that Ian might not cause as many claims as the broader Hurricane Irma, which made landfall in 2017 in the Florida Keys and barreled up the state. Ian made landfall Sept. 28 in Lee and Charlotte counties before heading northwest across the state.

Nevertheless, Patel said, “I will tell you, Fort Myers, Port Charlotte, Punta Gorda have been devastated by where Ian came ashore.”

Estimates of insured losses from Ian have varied widely during the past two weeks but are in the tens of billions of dollars. The storm, Florida’s first major hurricane since 2018, came after property insurers during the past two years have dumped policies and sought large rate increases because of financial losses.

That immediately spurred questions about whether the industry would have the financial wherewithal to handle Ian. Before the storm, six property insurers had been deemed insolvent since February.

The state-backed Citizens Property Insurance Corp., which serves as an insurer of last resort, estimated last week it will have $2.3 billion to $2.6 billion in losses from Ian.

Data posted Tuesday by the Florida Office of Insurance Regulation said an overall 471,783 claims had been filed from Ian, with estimated insured losses of $4.5 billion. Those numbers, which also include claims for such things as auto damage, are increasing daily as residents and businesses assess damages.

Reinsurance plays a critical role in Florida’s property-insurance market and helps drive costs of homeowners’ policies. Trying to help stabilize the insurance system, state lawmakers during a May special session approved spending $2 billion to provide reinsurance to carriers.

Universal and HCI said they did not tap into their portions of the state-funded reinsurance this year but will have it available in 2023.

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