The exodus of the larger national multiline carriers along coastal areas continues. Nationwide has reportedly filed a plan to non-renew 60,000 property insurance policies in Florida starting next July. Unlike State Farm, however, Nationwide Insurance Company has made arrangements with Tower Hill Insurance Group out of Gainesville, Florida, to accept all 60,000 policies.
The St. Petersburg Times reported that the Department of Insurance is supportive of the plan and that the new insurance companies taking over the policies are sufficiently strong despite recent downgrades:
Tom Zutell of the Florida Office of Insurance Regulation said the state appreciated that Nationwide arranged for a "soft landing" with Tower Hill. Customers always have the option of seeking other insurers, he said.
A.M. Best Co. recently downgraded the financial strength ratings of three property insurers associated with Tower Hill Insurance Group from B (fair) to D (poor). The ratings agency said it was concerned about the companies’ hurricane exposure and whether they had sufficient reinsurance to handle claims from a severe hurricane.
State regulators, however, said they had no concern about Tower Hill’s financial viability. Zutell said the company is constantly monitored, as are all insurers. He noted the company received an A (exceptional) from another ratings agency, Demotech Inc.
Yesterday, I read a proposed Nationwide policy that would cover both Windstorm and Flood. This was presented to the National Association of Insurance Commissioners at it September meeting. Nationwide’s plan calls for the federal government to act as a re-insurer of the policy.
The large national multi-line insurers are lobbying for such a policy while placing market pressure on such a plan by removing themselves, or threatening to so, from coastal areas in the Gulf Coast and Atlantic Coast.
The times they are a changing.