Florida’s capacity insurance is declining, and it has stopped writing new business

AM Best raised its financial strength for small-scale commercial insurance in Florida and decided to leave the Florida market.

“Due to various circumstances, the Florida market has undergone significant changes over the past year.

Since 1989, the insurer has covered property damage to small businesses, offices, landlords, gas stations, places of worship, contractors, funeral homes, and other small to medium businesses.

A.D. It was acquired in 2009 by Group Focus Insurance Group, which was acquired by Pek 6 Insurance and an investment company a year ago. According to the company’s website, McNill Group, a general link between capacity and management, continues to work with other service providers.

AM Best has announced that it will no longer participate in the rating process and has canceled its capacity. The rating agency recently reduced its financial strength to C ++ marginal and said it had a negative attitude towards the company.

The declines reflect the balance sheet and the “unwanted change” in capital operations as well as the erosion of profits.

“In addition, the company’s capital structure is based on a $ 7 million profit note issued in early 2022,” AM Best wrote in a statement. “The company continues to report negative losses as a result of its efforts to fix existing reserves and address future shortcomings.”

AM Best points out that recent improvements by the company have not solved the problem.

Pek 6 spokesman said Friday that insurance has changed dramatically over the past 18 months. “The Florida market has been extremely volatile over the past year, especially in re-insurance, which further reduces capacity insurance profitability,” the company said in a statement.

A.D. On July 5, the Capacity Management Board accepted the chairman’s resignation and appointed Andy McGregor. He also authorized the leadership to walk voluntarily. Two days later, the plan is submitted to the Florida Insurance Regulatory Office and is awaiting review. The company said it was committed to paying for all unforeseen claims from its current business book.

It has only 2,700 policies in place. A.D. In 2019, direct text premium was $ 17 million, or less than 0.1% of the Florida market, according to consultant Guy Frecker.

“PEAK6 InsurTech will continue to view Capacity Insurance as an asset and retain its licensing license in Florida so it will revisit opportunities for all coverage lines to re-enter the Florida market in the future,” Pek 6 said in a statement.

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