Florida focused property insurers are closing claims at a pace consistent with prior years despite the major storm losses of 2016, 2017 and 2018, according to a new study by financial analysis firm Demotech.
The study, which used data from S&P Global, compiled information from the annual statements of 91 insurance companies that write at least 80% of their homeowners business in Florida.
“Although we recognize that consumers, regulators, reinsurers, and others have expressed a level of frustration with outstanding claim counts, a review of the publicly available financial information indicated that the closure rates for accident years 2016, 2017, and 2018 are consistent with prior years despite the additional claims activity caused by Hurricanes Matthew, Irma, and Michael,” said Joe Petrelli, President at Demotech.
Demotech calculated claim closure rates based upon the claim count information reported to the National Association of Insurance Commissioners.
It found that the percentage of claims outstanding after 12 months was 12.8% for 2016, 14.0% for 2017, and 15.5% for 2018.
Comparably, the average percentage of outstanding claims at 12 months for years 2009 through 2018 was 14.3%.
“Despite named storms making landfall in Florida in 2016, 2017, and 2018, the closure rates for all accident years 2009 through 2018 were fairly steady,” noted Rachel Wilkins, Analyst, Demotech, Inc.
“Seamless processing of claims is impossible,” added Petrelli. “Consumers who submit claims have had their lives disrupted. If they could return to their prior status within seconds, the trauma and frustration would still be tragic.”
“As the need to recognize unique circumstances and nuances serve to protract the investigatory and valuation process, the frustration grows,” he explained.
“Similarly, it is often difficult to separate a consumer’s frustration with the vendor providing repairs from the frustration with the claim settlement process. The consistency of claim closure rates over a ten year period implies that carriers are consistently resolving open claims.”
