Florida: Universal Property & Casualty Outsells Citizens Property

12 Nov

Universal Property Casualty Insurance

Universal Property and Casualty continues to grab more of the South Florida insurance market a mere 15 months after dethroning Citizens Property Insurance Corp. as largest insurer of property in the southern part of the state.

Universal, which is based in Fort Lauderdale, managed to add 29,560 residential and commercial policies in the tri-county region between June 30, 2017, and June 30, 2018, according to data from the state Office of Insurance Regulation. This pushes the total number of policies written by Universal to 266,732, which is 41,304 more than Citizens, pushing them into second place.

Citizens is Now in Second Place

Citizens Property, which is the state run insurer of last resort has been the largest property insurance company in South Florida for years. As recently as 2011, Citizens was significantly larger than Universal with 616,071 policies in the Palm Beach, Broward and Miami-Dade areas compared to only 185,980 policies for Universal.

Around this time, the major hurricanes of 2004-2005 were keeping private insurers from entering the market due to the major losses they had recently experienced. Almost a decade passed without any major hurricanes striking Florida, which has led to some private insurers (Universal included) to get back into the South Florida market.

The state helped by incentivizing insurance companies to start writing policies and in many areas the private market insurers have absorbed most of the policies, except in the riskiest of areas, where Citizens still holds the majority of policies.

However, in more recent years, many of the insurers that stepped into depopulate the Citizens policies have pulled back out of the region due to ever increasing costs related to non-weather related water damage claims and lawsuits from water restoration companies. This exodus of insurance companies in the region can be traced back to the Assignment of Benefits issue that has plagued the area recently.

The latest report shows in detail which insurance companies are pulling out:

  • Heritage: -10,856 policies
  • United: -10,827 policies
  • People’s Trust: -8,824 policies
  • FedNat, formerly Federated National: -8,462 policies
  • Florida Peninsula: -7,282 policies
  • Homeowners Choice: -6,393 policies

Some insurers are bucking the trend and continue to write policies in the South Florida region. While Universal increased their portfolio the most, adding 29,560 policies, American Bankers of Florida grabbed 7,843 new policies to come in third place behind Citizens. The rest of the field shook out like this:

  • American Modern of Florida: +6,489 policies
  • National Specialty: +6,372 policies
  • Family Security: +4,238 policies
  • Johns: +4,124 policies

Why is Universal Expanding?

Why is Universal expanding while other insurance companies are pulling out? Company spokesman Travis Miller said in a recent Sun Sentinel article, Universal uses a, “sophisticated actuarial and modeling process to ensure it writes policies in a prudent manner.”

In addition to using sophisticated modeling, Universal is expanding its business outside of Florida which helps spread the risk around and lowers the probability that major losses from any particular region could threaten the financial health of the company.

Universal’s “experience in the Florida market and its scale contribute to its ability to write policies throughout the state, including the tricounty area,” Miller also said in the Sun Sentinel article

Another reason that Universal continues to expand is the fact that they are one of the few insurers that will still write full water damage coverage in the area, regardless of the homes age.

Most other insurers have capped non-weather water damage coverage to $10,000 if the home is 40 years old or older. This makes up almost half of the homes in the area and helps reduce an insurers exposure to these types of claims and the resulting lawsuits.