Demotech has affirmed the Financial Stability Rating (FSA) of A, Exceptional, assigned to Security First Insurance Company.
Financial analysis firm Demotech warned in January of this year that it was expecting downgrades for a number of carriers in Florida as a result of pressures on operating performance.
Yesterday, Demotech affirmed the financial stability of A, Exceptional, assigned to Gulfstream Property & Casualty Insurance Company, and has today announced the same measures for Security First.
Discussing Security First, Demotech’s President and Co-founder, Joseph Petrelli, explained that thoughtful succession planning, managing claim litigation and the company’s prudent reinsurance purchasing are three areas of its enterprise risk management that supports an FSR at the A level, in spite of an expectation of higher reinsurance costs in the near future.
Reinsurance prices are expected to rise at the upcoming Florida renewals as companies push for higher rates in loss-affected areas after a prolonged softened market state. For Floridian insurers requiring reinsurance protection, it’s expected that costs will be higher and terms and conditions tighter.
Melissa Burt DeVriese, President of Security First, commented: “Over the last few years, Florida has been hit with a large number of natural catastrophes causing losses that are compounded by a challenging legal environment. Security First has revamped its operations, including changing underwriting criteria and implementing necessary rate increases, to respond to the ever-changing Florida market.
“We sincerely appreciate Demotech’s willingness to work with us during these difficult times. Demotech has been rating companies like ours in Florida for decades and supporting and educating the policyholders of specialty-focused domestic insurance companies like ours.”