By Arek Sarkissian
February 14, 2020
A Florida insurance executive said his company needs to increase homeowner insurance premiums by 28.1 percent to maintain the company’s top financial rating.
Velocity Risk Underwriters CEO Phil Bowie told the Office of Insurance Regulation today that the increase will prepare the company for an anticipated increase in costs related to wind damage claims. It also would help preserve the company’s excellent A rating with credit rating agency AM Best Co.
“This would help us secure future capital and continue growth in Florida,” Bowie told state regulators during a hearing today in the state Capitol.
Nashville-based Velocity Risk Underwriters is the managing general agent for National Specialty Insurance Co.
The increase, if approved, would raise rates on more than 35,000 policyholders. It would apply to new insurance policies on Feb. 28 and renewals on April 26. A presentation by OIR showed the increases would be higher in inland counties than in those along the Gulf and Atlantic coasts.
The company isn’t seeking an increase to address rising litigation costs over claims disputes, Bowie said.
Two other Florida-based insurers blamed a recent surge in legal fees for premium increases requested over the past few months. During a Feb. 7 hearing, Capitol Preferred Insurance Co. told OIR it needed a 36.5 percent rate increase because lawsuits have jumped sevenfold over the past four years.
Most Florida insurers are rated by Ohio-based Demotech. The company alerted the state-subsidized Citizens Property Insurance Corp. in December that it might drop ratings for some companies by March due to poor financial performance.
Demotech President Joseph Petrelli told POLITICO last week he will decide whether to drop the ratings after he sees year-end financial reports, which are due in March.