Allstate Floridian said Friday it has reached an agreement with Royal Palm Insurance Company, a new property insurer in the state, to offer Allstate Floridian and other customers property insurance coverage.

Starting in November 2006, Royal Palm will provide property insurance options through the more than 900 Allstate agencies across Florida.

Under the agreement, which is subject to closing conditions, most of the 120,000 Allstate Floridian policyholders who will not be offered renewal by Allstate Floridian as their current policies expire, will be offered homeowners coverage from Royal Palm Insurance.

“This is the nation's most challenging property insurance market, and helping to bring a new company to the state will improve insurance availability in many communities,” said Phil Lawson, president of Allstate Floridian.

Sam Miller, executive vice president of the Florida Insurance Council, said the move bodes well for the overall state of the Florida insurance market in that these policies will not be fed into the state's residual market.

“It is clear that Florida is now becoming a state that is more dependent on small and midsized insurers,” he said.

Mr. Lawson noted that although Royal Palm is not an Allstate affiliate, customers who accept Royal Palm's offer will be able to continue to work with their Allstate agency and may contact that agency for more information on their specific homeowner's policy.

Allstate agents have been able to write new property insurance with up to 12 other companies besides Allstate Floridian, the subsidiary of the Northbrook, Ill.-based Allstate, the nation's second largest personal lines writer.

Last year Allstate announced a similar agreement for 95,000 customers with Universal Insurance Holdings Inc. of Fort Lauderdale.

Allstate has joined other major writers such as Nationwide in not only setting up Florida subsidiaries in the wake of Hurricane Andrew, but also drastically cutting back their catastrophe exposure after last year's losses.

Even with the Royal Palm move, however, Allstate said it will still be underwriting hundreds of thousands of Florida homeowner policies.

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