The insurer also said it was looking to non-renew the personal lines business in New York, beginning a total departure from personal lines.
UPC laid off 80 employees today, according to Mark Friedlander, Triple-Eye Director of Corporate Communications.
“We’ve broken the whole picture here, and in our opinion, it appears that we are on the verge of a sixth Florida property insurance bankruptcy this year,” Friedlander told Insurance Business.
UPC has about 185,000 residential policyholders, with Friedlander citing an AM Best analysis that said it was the eleventh largest multi-hazard author of homeowners in Florida, based on direct premiums, with a 3.23% market share in 2021. with.
Estimates seen by Triple-I suggested the UPC may have as many as 500,000 policyholders in the four affected states, Friedlander said, although he said “we cannot confirm this”.
Earlier this year, the UPC withdrew from Georgia, Massachusetts, North Carolina and South Carolina. UIH President and CEO Dan Peid said in an update Thursday that its commercial line business, which Friedlander estimated at around 5,000 policies, “continues to perform well”.
“They are filing plans to withdraw from these markets through a non-renewal process,” Friedlander said.
“But here’s the problem, because on top of that, ratings bureau Demotech informed the company yesterday that they plan to withdraw their financial stability rating, so they won’t have the rating.
“They were previously downgraded from A (Exceptional) to M (Medium) on August 1, and now the rating must be withdrawn – a company cannot continue to operate without a rating.”
Friedlander cautioned that federally-backed mortgage providers, as well as private mortgage businesses, will not accept customers without A-rated insurance cover.
“In our opinion, this systematic plan will not work, as they have no ratings,” Friedlander said.
“Mortgage companies are going to call it that and they’re going to call it a breach of their agreements with their customers that you are in default of your mortgage unless you take out your insurance.”
Friedlander said he was contacted by a member of the UPC staff, who was fired today and confirmed that 80 employees had been let go.
“It’s clearly an ominous sign,” Friedlander said. “I don’t see any way for the company to continue operating without any revenue stream at this point.”
In July, UPC disclosed that it was considering “a wide range of options” in terms of its strategy and capital position, including potential sales, mergers, or other equity-raising initiatives.
Five Florida domicile carriers have failed this year, the latest being Weston Property and Casualty Insurance, which was confirmed insolvent this month.
The state hasn’t seen a significant storm since 2018’s Michaels, with market sources including Friedlander blaming the state’s insurance crisis on its culture of litigation—79% of all Florida homeowner lawsuits nationwide, According to data from the Florida Governor’s Office, .
UPC has been contacted for comment.