It has continued to evolve and the exchange should be finalized by next year. The company said it began in 1972 as one small agency in south Florida, and is still owned by members of the same family. Tower Hill is no start-up or post-Hurricane Andrew insurer. ![]() If Citizens is 13% of the market, as some estimates have said, and the Tower Hill group of insurers now holds about 4% of the market, that could mean roughly 60,000 claims and less than $1 billion in insured losses. has estimated that it will see some 225,000 claims from Ian and as much as $2.6 billion in losses. But judging by other Florida insurers’ numbers, they could be significant. Tower Hill officials did not provide an estimate on claims and losses. “Our cat management plan covers at least a 100,000-claim event, there have not been any significant delays with adjusters or external partners, and we are executing our plan as scheduled with resources in line,” the company statement said. Regarding the effect of Hurricane Ian, which destroyed or damaged thousands of homes in southwest Florida, the group said that estimated losses are significantly under reinsurance limits. The main driver of losses reported earlier this year was storms, the company said, but did not elaborate on which events it was referring to. Tower Hill officials did not go into detail about the group’s current financial picture, but said that Tower Hill Prime’s balance sheet was strong and that risk-based capital is well above required levels. ![]() In late 2021, Tower Hill officials said that it had obtained a $200 million capital commitment from Gallatin Point Capital, Vantage Group Holdings and other investors. An AM Best analyst said an exchange program usually gives a company more flexibility, but is expensive to crank up. The exchange program should have 200,000 subscribers by the end of the year. The reciprocal exchange structure is an efficient way to build surplus through annual surplus contributions by subscribers, a spokeswoman for Tower Hill said at the time. “We look forward to expanding together in 2022 and beyond.” “Especially for our agency partners, transitioning to the reciprocal insurer business model affords continued growth through increased capacity availability,” Tower Hill Group said in a statement in May. The move raised questions at the time, but Tower Hill officials assured the market that all was well. ![]() And in May, Tower Hill Insurance Group said it had voluntarily withdrawn its Demotech rating for Tower Hill Preferred and Tower Hill Signature companies, noting that policies were being transferred into the reciprocal exchange. AM Best announced in April that it had cut the rating from B++ to B+, due in part to underwriting losses in the previous five years. It’s the second downgrade for Tower Hill Prime this year. That has left the company over-leveraged with loans. ![]() Tower Hill Prime continues to face challenges in setting adequate reserves, thanks in part to the excessive litigation plaguing most Florida property insurers. It could also mean trouble for policyholders who have mortgages, since secondary mortgage companies often require HO insurers to maintain top financial ratings.ĪM Best said that the financials don’t look good. Meanwhile, Tower Hill Prime’s stability rating by another firm, Demotech, has remained at “A exceptional,” Demotech reported.Īn appointed agent for Tower Hill said the AM Best downgrade could be “devastating” for the insurer, and would mean Tower Hill Prime won’t be able write as much business it needs to. The same day that AM Best announced the downgrade, Tower Hill said it no longer wished to participate and asked that its TH Prime rating be withdrawn altogether. “The downgrade of Tower Hill Prime’s Long-Term ICR (issuer credit rating) reflects a significant decline in its overall risk-adjusted capitalization, as measured by the best capital adequacy ratio (BCAR), to the very strong level from the strongest level, coupled with continued surplus erosion and elevated financial leverage of the holding company,” AM Best said in a statement. Tower Hill has said Prime plans to exit the Florida market sometime in 2023, and its personal lines policies will be moved to the exchange. from B+ (good) to B (fair) and said the outlook for the company is negative. 28 that it had downgraded the financial strength rating for Tower Hill Prime Insurance Co. Overall, the company remains in good financial shape, company officials said.īut AM Best said early this month that the changes do little to mask some potential financial problems, including shortcomings in surplus and capital. Tower Hill officials, whose Gainesville-based companies as recently as late 2021 held more than 5% of the Florida property market, have said for more than a year that policies from several TH companies are being rolled into Tower Hill Insurance Exchange, a type of reciprocal insurer.
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