American Integrity, Florida Peninsula Ready to Take Dropped Nationwide Policies

Florida domestic insurers, American Integrity Insurance Group and Florida Peninsula Insurance Co., each say they are ready to offer homeowners insurance coverage to Nationwide Insurance policyholders slated to be dropped by the insurer next year.

Early this month, Nationwide Insurance Co. of Florida said it is not renewing about 60,000 homeowners policies in the state, citing overexposure and the need to "preserve financial viability" (BestWire, Oct. 8, 2009). Affected policyholders will begin to receive notices in January, with nonrenewals beginning in July 2010.

American Integrity and Florida Peninsula are stepping up now to ask homeowners to consider them as options as they shop for replacement coverage just as many insurers had when State Farm Florida in January announced a plan to withdraw from the Florida property insurance market. State Farm Florida continues to negotiate with regulators over the best way to leave.

"We understand that the climate of the insurance industry is volatile, especially in Florida," said Robert Ritchie, president and chief executive officer of American Integrity, in a statement. "However, we are here to build lasting relationships with our agents and our policyholders by offering stability, professionalism and integrity."

Now represented by more than 2,600 agents, Tampa, Fla.-based American Integrity started in 2006 and has since assumed more than 70,000 homeowners, manufactured housing, and dwelling fire policies from the state-run Citizens Property Insurance Corp. The company has more than doubled its surplus, from $9.5 million to more than $23 million, according to the company's Web site.

Florida Peninsula of Boca Raton, Fla., said on its Web site that it preserves $70 million in surplus and now serves more than 100,000 Florida residents since opening its doors in 2005.

"We thought it was important to do everything we can with our capacity and infrastructure to offer Nationwide's 60,000 policyholders an alternative and choice," said Roger Desjadon, CEO of Florida Peninsula, in a statement.

When Nationwide made its announcement, the Florida Office of Insurance Regulation said that the Tower Hill Group, the state's fifth-largest writer of homeowners multiperil, had agreed to assume the policies although policyholders had a choice whether to accept the offer or go with another insurer.

In late August, A.M. Best Co. downgraded the financial strength ratings to D (Poor) from B (Fair) of Tower Hill Preferred, Tower Hill Prime and Omega, with a negative outlook based on the companies' exposure in Florida to frequent and severe catastrophic weather events in relation to their surplus position. However, the group did not buy reinsurance from the Florida Hurricane Catastrophe Fund upper layer and it is improving underwriting standards and geographic spread in the state, A.M. Best said (BestWire, Aug. 26, 2009). A.M. Best Co. withdrew the ratings at Tower Hill's request. The Florida OIR said the group met all of the state financial statutory guidelines. American Integrity and Florida Peninsula do not currently have an A.M. Best Co. rating.

The top five writers of homeowners multiperil in Florida, according to BestLink, were: State Farm Group, with a 17.7% market share; Citizens Property Insurance Corp., with 16.2%; Universal P&C Insurance Co., with 7.2%; USAA Group, with 5.1%; and Tower Hill Group, with 4.5%.