Another big player in the Citizens Property Corporation take-out arena has called a halt to its homeowners' and commercial lines activity in March, citing more than $2 billion of gross losses and 125,000 claims from the 2004 and 2005 hurricane seasons.
Poe Financial Group, a long-familiar industry family name, notified agents and an already shaky insurance community that its Southern Family Insurance Co. will no longer renew or insure new homeowner or commercial lines business. Its other companies, Atlantic Preferred Insurance Co. and Florida Preferred Property Insurance Co. will continue to renew homeowner accounts, but will not be writing new business. Policyholders with current or future claims are not expected to be affected.
The Poe group had taken 10,000 policies from Citizens just last year. The bulk of Poe's business — reportedly 85 percent of its nearly 320,000 policyholders — is in southeast and southwest Florida, and much of the coverage is on condos and condo associations.
Reports of more and more companies stopping homeowner coverage ranked near the top of the list of concerns being addressed by the Florida Legislature, now in its annual spring term.
Jim Wurdeman, Poe's president and CEO, stated on the company web site in a message to policyholders: "It should be no surprise that the activity from the 2004 and 2005 hurricane seasons has been substantial. Through it all, our reinsurance and agent partners have been incredibly supportive. Our associates have worked long and hard, six to seven days a week, 10 to 12 hours per day for the better part of two hurricane seasons. Their dedication has been, and continues to be, remarkable."
The combined whipping from the killer storm Katrina that hit Florida initially, and the huge insured property losses last fall from Wilma, were too much to endure.
"It's strictly an issue of storm losses," Bill Poe Jr., vice chairman for Poe Financial, said in a St. Petersburg Times article mid-March. "It just took our capital."
Poe's father, Bill Poe Sr., founded and owns the insurance company bearing his name. The younger Poe said if the needed capital is raised, the company will take a look at re-entering the market.
If no other insurer comes forward, the population within Citizens will continue to grow in the wrong direction, its exposure burgeoning daily.
The state's Hurricane Long-Term Task Force had just submitted its suggestions when the Poe announcement hit. A strong recommendation from that group urged the reduction of Citizens' exposure by limiting eligibility to home structures valued under $1 million, supported the continuation of the seasonal occupancy surcharge, and called for a refinement of Citizens' rate-making process and a review of the Citizens' take-out program.
"Tried to Do Everything Right"
Poe's Senior Vice President Tracy Upton said the company is extremely profitable "outside of storm activity," and was one of the few willing to persevere in South Florida.
"We've tried to pull out all the stops to keep things going. Our surplus was out of compliance. There may be future opportunities to cure the surplus issue, and we may be able to reconsider. It's a sad state of affairs in the state; it's been a rough two years."
Upton is operations manager for Southern Family. He said the word didn't really get spread just how devastating Wilma was in south Florida. Poe suffered one-third more losses on commercial than it did in 2004. "Wilma was worse than the combined 2004 storms," Upton said.
Interference in Claim Settling
He expressed strong feelings about what he described as near "predatory activity" by "outsiders" who take advantage of volunteer boards running condominium associations. Poe is a large insurer of these groups in the state, reportedly covering more than 1,500. Upton told of instances in which he fears unit owners have suffered due to greed and misinformation coming from some unscrupulous public adjusters and property managers.
In some cases, he said, settlements for critical repairs like roofs get delayed for weeks as association officers are urged by outside advisers, whose fees are a percentage of insurance payments, to hold out for hundreds of thousands more dollars. Upton maintained that some property managers delay invoicing or submit grossly incomplete invoices. He cited as an example an invoice that had no more information than the phrase: "Day laborers — $300,000." The property manager told OIR it had provided Poe with everything it asked for, Upton said.
Upton said he observed numerous cases of fraud, but realizes the state doesn't have the staff to investigate sufficiently.
Poe has been the subject of a high number of service complaints. Upton defended the company's performance, explaining that hundreds of "inquiries" registered at Insurance Village (the temporary claim headquarters set up in the hardest hit areas in the aftermath of last year's storms) were mislabeled as "complaints" by the state. And in the first week after the storm when circuits were down and phone lines overloaded, complaints were lodged when customers couldn't get through.
Upton is uncertain if depopulating Citizens will be a long-term solution to the insurance market's woes.
"We're vulnerable to wind," he said.
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