I recently posted, When Will United Property and Casualty Insurance Company Declare Itself Insolvent? Last week, United Property announced its financial condition at an earnings presentation.
One statistic jumped out:
Tangible book value per common share was $ 0.12 as of September 30th versus $ 5.10 at the beginning of the year. In nine months, United Property Insurance lost 97% of its tangible book value per share.
The company is leaving the residential personal lines market.
An article reporting on the poor financial position of the company, UPC Reports $173M Loss for Q3, Begins Personal Lines Non-Renewals Jan. 1, noted the following:
The parent company of United Property & Casualty Co., already working to close up shop in Florida and other states after years of financial setbacks, reported a $173 million net loss for the third quarter of this year.
The negative numbers were not unexpected from United P&C, which announced in August that it would non-renew personal lines in Florida and other states and had placed itself in an orderly runoff. That came after a buyer for the troubled insurer could not be found.
The latest quarterly report and an earnings call last week offered new information about how red the ink has been at what was once one of Florida’s larger personal-lines property carriers, and about UPC’s near-term future.
‘During the third quarter we made the difficult decision to withdraw United Property & Casualty Insurance Co. from the personal lines business in the states of Florida, Louisiana and Texas.,’ CEO Dan Peed said in a statement. ‘While Interboro Insurance Co. will continue to write personal lines business in the state of New York, the withdrawal allows us to focus our capacity on our commercial residential business written by American Coastal Insurance Co.’
What will happen with American Coastal Insurance? I am not certain. I can imagine that some are wondering whether UPC is taking claims and operations monies from its soon-to-be-defunct personal lines company and using that cash to pay claims and maintain operations in American Coastal, which is not being subject to runoff.
American Coastal will have backup from the Florida Insurance Guarantee Association. I am certain that many UPC policyholders may rather deal with the claims through FIGA versus the unethical claims conduct by UPC.
One final warning, these financials did not include the negative impact from Hurricane Nicole.
Thought For The Day
I learned long ago, never to wrestle with a pig. You get dirty, and besides, the pig likes it.
—George Bernard Shaw