Amid the many issues surrounding Florida’s property insurance market, ratings agency Demotech has announced that the insurers currently operating in the state are financially capable to weather the impacts of Hurricane Ian.
"The efficacy of catastrophe reinsurance programs, disaster recovery plans, and catastrophe response plans is being validated,” said Demotech co-founder and president Joseph Petrelli. “Although we cannot share material non-public information, we are pleased to report that, as of this date, based upon catastrophe modeling results and the early reporting of claims associated with Ian, each carrier reviewed and rated by Demotech is within their vertical reinsurance tower"
The firm also noted that once third-quarter financial results are reviewed and analyzed, Demotech will share its perspective with insurance carriers. Demotech also advised the public that it can view the most current Financial Stability Ratings (FSR) of insurance carriers on its website.
Demotech’s statements come after the ratings agency came under fire for threatening to downgrade and/or withdraw the FSRs of 17 insurers operating in Florida in July after determining that they were not creditworthy.
The ratings agency indefinitely suspended the downgrades since, but several ratings updates were still issued, namely for Weston Property & Casualty Insurance Company, FedNat Insurance Company, and United Property & Casualty Insurance Company. The first two insurers had their FSRs withdrawn, while the third saw its FSR downgraded from “A” (Exceptional) to “M” (Moderate).
State lawmakers are now scrambling to find an alternative to Demotech, with a legislative panel voting to spend $1.5 million on consultants who can find a suitable ratings replacement.