The insurer additionally stated it was trying to non-renew private traces enterprise in New York, heralding a complete departure from private traces.
UPC can be understood to have laid off 80 employees as we speak, in accordance with Mark Friedlander, Triple-i director of company communications.
“We have damaged down the total image right here, and in our opinion, it seems we’re on the verge of a sixth Florida property insurance coverage insolvency this 12 months,” Friedlander advised Insurance coverage Enterprise.
UPC has roughly 185,000 residential policyholders, Friedlander stated, citing AM Finest evaluation that confirmed it was the eleventh largest householders’ multi-peril author in Florida based mostly on direct premiums, with a 3.23% market share in 2021.
Estimates seen by Triple-i have urged that UPC might have greater than 500,000 policyholders throughout the 4 affected states, Friedlander stated, although he added that “we will’t affirm that”.
Earlier this 12 months, UPC withdrew from Georgia, Massachusetts, North Carolina, and South Carolina. UIH chairman and CEO Dan Peed stated in an replace on Thursday that its business traces enterprise, which Friedlander estimated at round 5000 insurance policies, “continued to carry out effectively”.
“They’re submitting a plan to withdraw from these markets by way of a non-renewal course of,” Friedlander stated.
“However here is the issue, as a result of on prime of this, the scores bureau Demotech knowledgeable the corporate yesterday they’re planning to withdraw their monetary stability ranking, so they won’t have a ranking.
“They have been beforehand downgraded on August 1 from an A (distinctive) to an M (reasonable), and now the ranking needs to be withdrawn – an organization can’t proceed to function and not using a ranking.”
Friedlander cautioned that federally backed mortgage suppliers, in addition to non-public mortgage companies, wouldn’t settle for clients with out A rated insurance coverage cowl.
“This orderly plan is simply not going to work, in our opinion, as a result of they haven’t any ranking,” Friedlander stated.
“The mortgage corporations are going to name this and they’ll name the violation of their agreements with their clients that you’re in default of your mortgage except you progress your insurance coverage.”
Friedlander stated he had been contacted by a member of UPC employees, who was laid off as we speak and confirmed 80 members of employees had been let go.
“That’s clearly an ominous signal,” Friedlander stated. “I simply do not see any path at this level for the corporate to proceed to function with no income stream.”
In July, UPC revealed it was contemplating “a variety of choices” when it comes to its technique and capital place, together with a possible sale, merger, or different fairness elevating initiatives.
5 Florida domiciled carriers have failed this 12 months, the most recent being Weston Property & Casualty Insurance coverage, which was confirmed bancrupt this month.
The state has not seen a big hurricane hit since 2018’s Michael, with market sources together with Friedlander having blamed the state’s insurance coverage woes on its tradition of litigation – Florida accounts for 79% of all householders’ lawsuits nationwide, in accordance with knowledge from the Florida Governor’s Workplace.
UPC has been contacted for remark.