Few home insurance companies are leaving the New York market, but many have taken steps to reduce their exposure in downstate areas, according to a new survey by an agents group.
The findings were disclosed yesterday by the Professional Insurance Agents of New York State Inc. almost six months after the Allstate Group announcement that it would cease insuring new homeowners and not renew some policyholders in Nassau, Suffolk, Westchester and the five boroughs of New York City.
Their poll also found a belief among agents that the market is tightening.
In January when Allstate revealed its move, there was fear of a domino effect, but PIANY's survey found "very few companies following suit," according to Ellen D. Kiehl, assistant executive director for government and industry affairs, with the PIA New York State, New Jersey, New Hampshire and Connecticut.
Of the 70 responding agencies, 40 percent don't plan to stop writing new business and 21 percent actually want to pick up business dropped by Allstate. In fact, only 10 percent of all the businesses plan actions similar to Allstate's, while 29 percent say companies are taking a "wait and see" attitude, according to PIANY.
These survey results were "very reassuring," according to Ms. Kiehl. They indicate that the market is still stabilizing and viable, though many agencies are tightening restrictions: 40 percent stopped accepting new business; 23 percent are nonrenewing more homeowners than usual; 67 percent are adopting stricter guidelines regarding a home's distance to water; and 43 percent are requiring more or larger deductibles for windstorm losses.
Agents are turning to residual market alternatives for homes that are close to the water, the survey found. The percent of agents who sometimes use the residual market, New York Property Insurance Underwriting Association, rose to 45 percent from 41 percent, and those who sometimes use excess line markets rose to 66 percent from 61 percent.
The result that concerned Ms. Kiehl was the "perspective that the market is tightening."
PIANY routinely asks members to rate the availability of insurance on a 1-to-5 scale where a 1 means "highly competitive" and a 5 means "impossible to place (except in a state-provided residual market)." The coastal homeowners insurance rating has tightened to a 4.1 from 3.6 in February.
The "5-point base jump is unusual" and, when coupled with 59 percent of respondents who believe that their homeowners companies are less competitive than they had been a year ago, shows the residual fear and anxiety of agents who believe the market to be tightening more than it is, she said.
Though the number of homeowners insurance companies has remained "stable since February," according to Ms. Kiehl, "everything depends on this storm season."
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