Reinsurance News

SURE picks up 14,000 FedNat homeowners policies in South Carolina

7th July 2022 - Author: Kassandra Jimenez-Sanchez

SureChoice Underwriters Reciprocal Exchange (SURE), a carrier partner of insurtech company SageSure, has assumed more than 14,000 South Carolina homeowners policies from FedNat Insurance Company.

fednat-logoThis announcement comes after FedNat completed a £15m investment in Monarch as the Florida Office of Insurance regulation authorised the assumption of 78,000 policies between the two firms.

The Monarch investment was made through funds managed by Hale Group, who is now majority owner of Monarch, with FedNat holding a minority interest and maintaining representation on Monarch’s board.

These moves come as a result of the downgrading of FedNat’s financial stability ratings (FSR) from an ‘A’ to ‘S’ by rating agency Demotech, which means the insurers’ policies will no longer be deemed acceptable by Fannie Mae and Freddie Mac for mortgage insurance.

Last November, FedNat announced it was pulling out of South Carolina, Texas, Louisiana, Mississippi and Alabama, leaving thousands of policyholders at risk of interrupted coverage by July 1, right before hurricane season.

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Before FedNat stopped providing coverage in South Carolina, SageSure implemented a transition plan for its FedNat policyholders.

According to the announcement, this plan would ensure they have access to highly rated coverage through SURE, rated “A” (Exceptional) by Demotech and with more than $550m in reinsurance protection.

In total, SageSure has transitioned thousands of policies from FedNat to SURE in Alabama, Louisiana, Mississippi, Texas, and South Carolina.

Terry McLean, co-founder and CEO of SageSure, said: “We responded to FedNat’s downgrade by expediting the transfer of exposure from FedNat to SURE as quickly as possible while honouring our commitments to reinsurers.

“Our team has worked incredibly hard to ensure South Carolina homeowners have reliable, continuous protection for their most valuable asset.”

According to the announcement, the transition coincides with a tightening property insurance market with little appetite for coastal risk.

SageSure and SURE have said they can consistently serve cat-exposed markets because of their rigorous underwriting approach and superior risk segmentation that leverages more variables highly predictive of loss.

Ed Konar, President of SURE, commented: “These risks were underwritten by SageSure and are a strong fit for our portfolio.

“We’re excited to welcome our new policyholders, and we’re grateful to the South Carolina Department of Insurance for the support and assistance with this transition.”

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