Severely damaged house after hurricane Ian in Florida mobile home residential area. Credit: bilanol/Adobe Stock Severely damaged house after hurricane Ian in Florida mobile home residential area. Credit: bilanol/Adobe Stock

Two Florida property-insurance companies this week offered assurances about their financial health as they deal with thousands of claims from Hurricane Ian.

But another insurer late Wednesday afternoon issued a news release that pointed to major concerns.

"Hurricane Ian was a devastating storm, and our primary focus today is on servicing our policyholders," Brad Martz, president and chief financial officer of United Insurance Holdings Corp., said in the news release. "There is a very high degree of uncertainty regarding the long-term economic implications of this event for our company, and the entire industry. The company will be working closely with its reinsurers, service providers and other key stakeholders to adjudicate losses accurately and timely."

Earlier in the week, the parent companies of Universal Property and Casualty Insurance Co. and Homeowners Choice Property and Casualty Insurance Co. issued written and video statements offering assurances as Florida's troubled insurance industry faces widespread questions about its ability to pay claims after the Category 4 storm.

The chief executives of Universal Holdings, Inc., and HCI Group, Inc., the parent companies of Universal and Homeowners Choice, respectively, pointed to reinsurance — essentially backup coverage — that they had purchased earlier in the year to help handle hurricanes.

"We can sustain a much greater loss than Ian has dealt to us," Paresh Patel, HCI's chairman and chief executive officer, said in a video posted Monday on the Tampa-based company's website.

Universal Holdings estimated an ultimate gross loss of $1 billion from the storm but said that was well below what is known as a "reinsurance tower," which includes a combination of reinsurance coverages. Universal will be responsible, at least in part, for paying "retentions," somewhat akin to deductibles on the reinsurance coverage.

"Our claims, catastrophe response and customer service teams are on the ground and on the phone, helping our policyholders in their time of need," Stephen Donaghy, chief executive officer of Fort Lauderdale-based Universal Holdings, said in a statement Tuesday. "With our dedicated staff, our disaster preparedness planning and conservative reinsurance program, we're well prepared for this event and maintain substantial reinsurance protection for any subsequent events."

Universal said it had received about 18,000 Ian claims, while Patel said Monday that HCI had received about 10,000 claims and expected 2,000 more. Patel cited an estimated net loss of $78 million for HCI, after reinsurance is taken into consideration.

Both publicly traded companies indicated that Ian might not cause as many claims as the broader Hurricane Irma, which made landfall in 2017 in the Florida Keys and barreled up the state. Ian made landfall Sept. 28 in Lee and Charlotte counties before heading northwest across the state.

Nevertheless, Patel said, "I will tell you, Fort Myers, Port Charlotte, Punta Gorda have been devastated by where Ian came ashore."

United Insurance Holdings, which is the parent of United Property & Casualty Insurance Co. and American Coastal Insurance Co., said in the news release Wednesday that it had received about 19,000 claims and anticipated it will receive 27,000 to 30,000 claims.

The St. Petersburg-based United faced financial troubles before Hurricane Ian. In August, it announced plans to withdraw from the "personal lines" market, including homeowners' insurance, in Florida and other states. It said it would conduct what is known in the insurance industry as a runoff, which means policies would be gradually dropped as they come up for renewal.

Estimates of insured losses from Ian have varied widely during the past two weeks but are in the tens of billions of dollars. The storm, Florida's first major hurricane since 2018, came after property insurers during the past two years have dumped policies and sought large rate increases because of financial losses.

That immediately spurred questions about whether the industry would have the financial wherewithal to handle Ian. Before the storm, six property insurers had been deemed insolvent since February.

The state-backed Citizens Property Insurance Corp., which serves as an insurer of last resort, estimated last week it will have $2.3 billion to $2.6 billion in losses from Ian.

Data posted Tuesday by the Florida Office of Insurance Regulation said an overall 471,783 claims had been filed from Ian, with estimated insured losses of $4.5 billion. Those numbers, which also include claims for such things as auto damage, are increasing daily as residents and businesses assess damages.

Reinsurance plays a critical role in Florida's property-insurance market and helps drive costs of homeowners' policies. Trying to help stabilize the insurance system, state lawmakers during a May special session approved spending $2 billion to provide reinsurance to carriers.

Universal Holdings and HCI said they did not tap into their portions of the state-funded reinsurance this year but will have it available in 2023.

Copyright 2022 News Service of Florida. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.