March 13, 2017
Dear Agency Partner,
Florida Specialty Insurance Company received notification from Demotech, Inc. on Friday, March 10, affirming Florida Specialty’s Financial Stability Rating of “A” (Exceptional).
Florida Specialty continues to be open for new business and we look forward to working closely with our agency partners as new opportunities are presented. Florida Specialty will conclude the last part of its acquisition of the Mount Beacon Insurance Company effective May 15, 2017 when ALL of the remaining Mount Beacon policies will be moved onto Florida Specialty paper.
Should you have any questions, please contact your field marketing representative.
President & COO
Florida Specialty Insurance Company
FLORIDA INSURER MT. BEACON CLOSES ITS DOORS, POLICIES TAKEN OVER BY FLORIDA SPECIALTY INSURANCE COMPANY
5/31/17 Best’s News Service via Bestwire – A start-up player in Florida’s home insurance market, Mount Beacon Insurance Co., is going out of business and about 22,000 of its policies have been transferred to Florida Specialty Insurance Co., the latter firm’s CEO said Monday. Call it a sign of the challenges facing consumers in Florida, where many big national insurers have largely stopped writing new business and a host of new and smaller competitors have stepped into the fray.
The Palm Beach Post reported trouble finding Mount Beacon’s headquarters less than a year after its 2014 founding. It drew attention for making offers to take customers of state-run Citizens Property Insurance Corp. who lived in mobile homes – an unconventional target for such offers. At the time, there was no company sign at the company’s official Pinellas Park address in state corporate records and an employee at the front desk had never heard of the CEO.
By the start of 2015, Mount Beach had 31,871 customers, including 1,624 in Palm Beach County. The most recent statewide customer count available to The Palm Beach Post’s insurance guide was about 37,000.
Now the policies are in good hands, the new stewards say.
"Agency and policyholder information can now be found on the Florida Specialty Insurance Company website, www.floridaspecialty.com," said Susan J. Patschak, chief executive officer of Florida Specialty Insurance Co. in Sarasota. "Customer service, underwriting, billing and claim service numbers have not changed and can be found on the Florida Specialty website as well."
After the additional policies, Florida Specialty has about 50,000 customers in Florida, she said.
The manufactured home business that Mount Beacon took out of Citizens was profitable before reinsurance costs, referring to back-up coverage insurance companies buy to make sure they can cover claims after a disaster, Patschak said. It was these costs that made this profitable underlying business unprofitable, she said.
As of May 15, 2017, Mount Beacon Insurance Co. no longer had any active policies and its remaining assets will be merged into a firm based out of state, Oakwood Insurance Co., officials said.
Florida Specialty Insurance Co. said it received notification from ratings firm Demotech Inc. on March 10 affirming Florida Specialty’s Financial Stability Rating of "A (Exceptional)." Demotech plays an important role in helping determine acceptability in the mortgage lending marketplace for smaller companies not necessarily rated by other ratings firms.
The Palm Beach Post reported in March that Mount Beacon was among several Florida insurers that merged, changed ownership, shifted customers to new hands or added new investment after threatened ratings downgrades from Demotech. The return of hurricanes to Florida in 2016 after an 11-year pause and trends in non-catastrophe claims placed financial pressure on many of the state’s fledgling companies, Demotech said.
From a Demotech release in March:
Mount Beacon Insurance Company / Florida Specialty
"Although the Company met or exceeded the level of capital and surplus required under the statutes of the State of Florida and management has committed to do so into the future, the Company did not report financials acceptable to Demotech. The investors controlling the Company opted to sell the Company rather than recommit to Florida or adapt its business model to the emerging operating environment. Mount Beacon Insurance Company has been acquired by Florida Specialty Acquisition, LLC. Mount Beacon will maintain the FSR previously assigned while the remainder of its policies are moved to Florida Specialty Insurance Company by May 15, 2017."
FLORIDA SPECIALTY COO: MOUNT BEACON ACQUISITION EXPANDS LINE
5/31/2017 BestWeek – SARASOTA, Fla. – Florida Specialty Insurance Co.’s acquisition of Mount Beacon Insurance has doubled the size of the company in its first two years, according to President and Chief Operating Officer Rick Loden.
Florida Specialty formed two years ago with the acquisition of Florida home and mobile-home writer Safeway Property Insurance Co. Loden and Chief Executive Officer Susan Patschak didn’t plan to grow the company through another acquisition, he told Best’s News Service, but then the Mount Beacon opportunity surfaced.
As the third-largest manufactured home insurer in the state, Loden said Mount Beacon was accretive to his company’s book. "We’re getting good at it," he said about the segment. Mount Beacon spreads the risk geographically in Florida. Previously the business was concentrated in the Sarasota area.
Regulators allowed Florida Specialty to nonrenew Mount Beacon policies – which were fully transitioned to the new company’s paper in mid-May – outside of its risk appetite. For instance, his company insures manufactured homes built since 1995 and requires tie-downs. During Hurricane Matthew he said the niche preformed as well as most insurers’ homeowners books. "Newer manufactured homes, in many ways, are built better than some of the site-built homes in Florida. We’ve been to the factories. They have inspectors there every day."
The former Safeway book’s manufactured-home business was only in age-restricted communities for residents 55 or older. That offers guidelines and bylaws, along with park managers that can help residents understand issues such as assignment of benefits, Loden said. AOB allows homeowners to assign insurance benefits to home repair vendors, who then might charge higher costs and sometimes sue when insurers dispute the bill.
Loden has worked in the industry for decades and was president and CEO of Insurance Servicing & Adjusting Co. in Weston, Florida, prior to forming Florida Specialty with Patschak, formerly CEO of Canopius Bermuda.
He weathered issues such as mold and sinkholes and predicts, "One of these days, somebody is going to fix the AOB issue," although he doesn’t think it will be state legislators.
The Florida Senate on May 5 withdrew legislation insurance groups said was needed to combat fraud and abuse of AOB lawsuits. Insurers and business groups have blamed the increase in water damage claims on the practice (Best’s News Service, May 8, 2017).
Florida Specialty has a lot of water claims, but just a few AOB claims, Loden said. It’s not enough to be considered a problem for the company. He credits a pro-active approach, saying employees visit manufactured home park managers to dispense information, leaving printed materials for all, not just their policyholders. Rapid claims response mitigates the likelihood of an AOB claim.
And, when it comes down to it, "I’m not sure there’s a lot of money trying to go after a 1995 manufactured home," said Loden.
Increasingly that’s a smaller portion of Florida Specialty’s book. The insurer has expanded its homeowners line, seeking a 50/50 split between manufactured and homeowners lines. Early on about 20% of its book was homeowners, now it’s 40%, said Loden.
It will write properties valued up to $750,000, he added.
The company’s logo is the sandhill crane, he pointed out, because the species mates for life. For Florida Specialty, it represents what the company hopes will be lifelong commitments to partners and customers.
FLORIDA SPECIALTY ACQUISITION, LLC ACQUIRES MOUNT BEACON INSURANCE COMPANY
06/07/16 – Sarasota, Florida – We are pleased to announce that Florida Specialty Acquisition, LLC has acquired the Mount Beacon Insurance Company (Mount Beacon). Mount Beacon is a home and manufactured home insurance company specific to the state and is located in St. Petersburg, Florida.
“The strategic decision to acquire Mount Beacon Insurance Company fits extremely well into Florida Specialty’s short and long-term business plans” commented Susan Patschak, Chief Executive of the Florida Specialty Insurance Company.
Susan Patschak, CEO and Rick Loden, President/COO of Florida Specialty Insurance Company, will head up the newly acquired company. Before acquiring Safeway Property Insurance Company (re-named Florida Specialty) in August of 2015, Ms. Patschak was formerly the CEO of Canopius Bermuda and Mr. Loden, the President and CEO of Insurance Servicing and Adjusting Company located in Ft. Lauderdale, Florida. Dan Lavin is Florida Specialty’s Chief Underwriting Officer.
We do not anticipate any operational changes within either company for the foreseeable future. First and foremost, our immediate responsibility to you and our insureds is to make certain that we are providing the best possible service as we move into the 2016 wind season.
In the meantime, should you have any questions, please do not hesitate to contact your Marketing Representative, or me directly. We will be attending the upcoming FAIA convention, so let us know if you would like to meet with any of our staff, otherwise, please stop by and say hello.
We are excited about continuing our Florida Specialty journey together.
FLORIDA SPECIALTY HOLDINGS AGREEMENT ANNOUNCED
02/13/15 – Sarasota, Florida – Safeway Financial Holdings and Florida Specialty Holdings have entered into an agreement whereby Florida Specialty Holdings will acquire 100% of the stock of the Safeway Property Insurance Company (Safeway Property). Safeway Property is a home and manufactured home insurance company specific to the state of Florida and is located in Gainesville, Florida.
“The strategic decision has been made to divest Safeway Property in order to concentrate on our automobile franchise” commented Robert M. Bordeman, Chief Executive of the Safeway Insurance Group.
Susan Patschak, CEO and Rick Loden, President/COO will head up the newly acquired company. Ms. Patschak is formerly the CEO of Canopius Bermuda and Mr. Loden, the President and CEO of Insurance Servicing and Adjusting Company located in Ft. Lauderdale, Florida. Paul DiFrancesco will join the management team and assume the role of Chief Underwriting Officer. Mr. DiFrancesco’s most recent position was Chief Insurance Officer at Cypress Insurance Group.
Regulatory approval is being sought by the Illinois Department of Insurance with plans to re-brand the entity as Florida Specialty Insurance Company (Florida Specialty).
“Safeway Property is a highly successful operation and a solid platform to assist Florida Specialty in executing its business strategy” according to Patschak. Loden stated, “It is our plan to expand the portfolio built by the Safeway Property team throughout the state of Florida”.
JLT Capital Markets serves as financial advisors to Florida Specialty Holdings.