All 67 companies offering homeowner’s insurance in Florida have enough of a financial buffer to handle the damage equivalent of four hurricanes in a single season, according to a new report prepared by the state’s top financial regulator Monday.
Jeff Atwater--chief financial officer for the state of Florida—approved the results. He said the report, which revealed that every insurer in Florida passed a “stress test” that simulated a disaster scenario, should help increase confidence in the state’s rebounding insurance industry.
“Consumers deserve to have confidence in their carrier, and we’ll continue to share information that shows the processes that are undertaken to test their financial strength,” Atwater said in a statement. The report, though, contains little specificity for customers or agents to compare carriers.
The stress test screened the 67 insurers through storm models based on three infamous storm seasons: 1947’s Fort Lauderdale storm, 1921 in Tampa Bay, and 2004’s season where four storms struck the state, resulting in 1.6 million insurance claims. All 67 passed the test, which meant that they had surplus equal to at least 10% of the liabilities after payouts from all the storms were accounted for.
The report revealed that some companies performed better than others; the identities of these companies were not disclosed by the report. Nine companies passed the test with a remaining buffer of 110% to 140% of what was required. Thirty companies passed with more than 500% of the requirement.
The report comes as Citizens Property Insurance Company continues to “encourage” customers to move to private insurance carriers, using tactics Atwater feared are close to coercion. Since 2012, approximately a million customers were transferred out of Citizens, with another 130,000 scheduled for removal by year’s end.
Atwater called for the aggressive stress testing of private insurers partly due to the influx of homeowners transferring from Citizens.
