PROPERTY INSURANCE REPORT the Authority on Insuring Homes and Commercial Property

Reprinted With Permission Of The Publisher PROPERTY INSURANCE REPORT The Authority on Insuring Homes and Commercial Property

Vol. 27#19/643 March 15, 2021 Florida Targets Roof Coverage, INSIDE Lawsuits to Defuse Market Crisis Wildfire mitigationis essential outside of Not for the first time, theFlorida homeowners insur- designated wildfire zones.Page 2 ance market is in crisis. Insurers argue that without legislation to rein in litigation and roof claims, the situation can Clearing vegetation yields savings. Page 3 only get worse. Senate Bill 76, which addresses both roofing losses and Financially struggling insurers withdraw from parts of Florida. Page 5 litigation incentives, has won approval from two key Senate committees and is on its way to the Rules Committee, the Limiting roof repair costs presents significant last stop before a full Senate vote. challenges. Page 9 The proposed law would limit coverage in standard policies for roofs more than 10 years old – dramatically Progressive cracks the top 10. Page 11 increasing out-of-pocket costs for consumers; shorten the deadline for filing property claims from three to two years; NAIC: Homeowners Premium require 60-days’ notice and a settlement demand before Rose About 4% in 2020 filing suit over a property claim; provide a formula for Homeowners insurers grew awarding attorney fees; and codify federal limits for the use written premium about 4.0% in 2020, less than the 5% growth of Please see FLORIDA on Page 4 2019 and 4.8% growth of 2018, according to a preliminary report Finding Effective Mitigation For by the National Association of Wildfire Requires New Modeling Insurance Commissioners. Removing plants and clearing space around existing The NAIC’s projected loss homes in California, paired with additional mitigation ratio of 66.5% is a deterioration steps, could prevent billions of dollars in wildfire losses an- from 58.2% in 2019, but still nually, according to research from catastrophe risk modeler better than the 72.4% of 2018 Zesty.ai. and 73.5% of 2017, both years The San Francisco-based company analyzed aerial im- suffering from large California agery to identify how individual property characteristics wildfire losses. impacted wildfire losses and which mitigation steps would The report, available on the prevent the most damage in the future. NAIC website, captures data The analysis comes as California grapples with a home- from 97.3% of company filings owners insurance crisis in the wake of devastating wildfires. and includes premium written Regulators are pressuring insurers to offer coverage and by U.S. carriers in Canada and discounts to homeowners who have taken steps to protect U.S. territories. It is very close to their homes, but insurers say they still lack enough data to what the final numbers will be. quantify the effectiveness of specific mitigation steps and We will be publishing our more how much they should be rewarded. Last month, California Please see PREMIUM on Page 11 Please see WILDFIRE MITIGATION on Page 2

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Page 2 PROPERTY INSURANCE REPORT March 15, 2021 WILDFIRE MITIGATION Continued from Page 1 ance Report National Conference presented on- Insurance Commissioner Ricardo Lara pro- line. (Watch the video presentation here.) posed new transparency rules that would require The fire was a wakeup call, Toth said. “Most insurance companies to give policyholders ac- of the $9 billion of losses from this single event cess to their property’s wildfire risk scores, and were driven by surprise losses outside of the along with it the opportunity to make mitigative high fire-hazard zones.” improvements to lower their score. Wildfire risk Across all fires in California that year, about scores play a large role in pricing. $15 billion of $20 billion in overall wildfire loss- Zesty’s research offers early insights into es were insured. In 2018, about $18 billion of the which actions carriers, regulators and the public $24 billion in overall losses were insured. Losses should prioritize as they accept that the 2017, subsided in 2019 before rising again to about $11 2018 and 2020 wildfire seasons could represent billion in total losses in 2020. The three spikes a destructive new normal. Zesty’s data suggests pushed the 10-year average to about $5 billion in which improvements homeowners can make to annual losses, a figure that will increase substan- protect homes in at-risk locations. It also tells tially if future wildfire seasons reflect the pattern insurers which presumably safe properties have set by three of the last four years, he said. characteristics that make them unexpectedly vul- Zesty’s study follows work done by IBHS nerable to wildfire losses and which properties in last summer to tailor mitigation recommenda- tions for homeowners in suburban areas that may The study ranked mitigation be more limited in how many feet of vegetation steps based on their potential they can clear because of close proximity to for reducing losses and the fea- neighbors, compared to more rural homes with sibility of implementing them. ample space. The mitigation research by both parties has an inherent collaborative message: risky areas are actually well protected. While one homeowner may not be able to clear Further research by modelers like Zesty and 30 feet of vegetation from their perimeter, two organizations like the Insurance Institute for neighbors side-by-side, each clearing 10 to 15 Business & Home Safety (IBHS), which con- feet, can combine to reduce the spread of wild- tributed research to Zesty’s project, will allow fire. insurers to quantify the benefits of clearing de- Similarly, if both houses have screens that fensible space around a home, protecting vents prevent embers from entering vents, neither with screens or other mitigation strategies. home will present a risk to the other by catching The Tubbs Fire in 2017 underscored the risk fire. In addition to the costs of mitigation, con- of relying on traditional wildfire risk areas – like vincing homeowners to potentially reduce the those designated by the state of California as a curb appeal of their property by replacing bushes Fire Hazard Severity Zone – that draw bound- and trees with rocks is another challenge. aries based on broad physical or geographic In its report, Zesty compared high-resolution attributes rather than individual property charac- aerial imagery taken before and after about 1,400 teristics. recent California wildfires to analyze which In the Tubbs Fire, about 100 properties property and building characteristics resulted burned within the high fire-hazard zones, and in fewer losses. The images provide data about about 5,000 properties burned outside of where a roof’s material and shape, if vegetation over- the industry expected losses to occur, Zesty CEO hangs the property, or how close other plants, Attila Toth said during the 2020 Property Insur- Please see WILDFIRE MITIGATION on Page 3

Warning: Property Insurance Report is a confidential, copyrighted newsletter for subscribers only. No part of this publication may be reproduced by any form or means, including scanning or photocopying, without prior permission of the Publisher. For information call (949) 443-0330. Reprinted With Permission Of The Publisher

March 15, 2021 PROPERTY INSURANCE REPORT Page 3 WILDFIRE MITIGATION Continued from Page 2 tation between 30 and 100 structures or objects may be, among other infor- feet, which was defined as mation. “very challenging.” That Overlaying this property-specific information would save about 19% with a risk model that evaluates broader factors of threatened homes, or – such as topography, wind direction and precip- about $900 million. itation – Zesty estimated about 8.8 million Cali- “This is not only fornia properties are at low or no risk. about changing the curb Of the remaining 1.2 million properties in appeal of your own home, risky areas, aerial information can help reveal you have to work togeth- Attila Toth which properties, based on their individual char- er with the neighbors,” Zesty.ai acteristics, are actually at high risk and which he said. “And probably can be underwritten with more confidence. the city or the township has to chip in, as well, Toth provided the example of a property in because there will be vegetation that will be on the Malibu Hills that survived the destructive public property.” Woolsey Fire. The home is deep into the wild- The report had some surprising findings. No- land-urban interface (WUI) area at risk for wild- tably, incentives for homeowners to replace vul- fire losses, and modeling without property-spe- nerable wood shake roofs have worked, leaving cific characteristics would suggest the house was few that need replacement with more resilient a likely candidate to burn down. But it survived. materials. Viewed from above, images show a house with Aerial imagery revealed that only about 0.1% ample defensible space around its perimeter — of homes in California still have the vulnerable no trees, bushes, fences or decks. material covering their homes. About 76% have The study ranked similar mitigation steps better composite shingles and 22% have tile, the from “feasible” to “difficult” and calculated the best-performing material. Homes with flat, slate overall improvement each step would have on and metal roofs each make up 1% of the housing losses in California if applied across all at-risk stock. homes. A bigger opportunity for loss prevention The most “feasible” action – clearing vege- is upgrading houses built before 2008 to the tation that overhangs homes, like trees – would building code created that year. Chapter 7A have a modest impact, saving about 6% of the of the 2008 California building code requires 2,876 California properties estimated to be lost new homes in wildfire risk areas to use specific annually to wildfire at the current 10-year aver- fire-resistant materials, like fire-retardant roof age. The savings represent about $300 million in coating, or ember-resistant vents. insured losses. Aerial imagery doesn’t capture these im- Clearing vegetation within 30 feet of the provements, but Zesty made the assumption in property, defined as “somewhat feasible,” would its model that homes built after 2008 conform to save about 22% of the homes and about $1 bil- code. Updating older houses to 2008 code would lion in insured losses annually. save about 12% of threatened houses, or about “There could be vegetation here that is fall- $600 million annually. ing on the neighbor’s parcel,” Toth said. “So it’s “In reality, this could be a very costly exer- not an easy fix, but it’s something that is more cise,” he said. “All that said, the impact is big. doable than others.” So it makes sense for providing incentives for Benefits drop at the next step, clearing vege- Please see WILDFIRE MITIGATION on Page 11

Page 4 PROPERTY INSURANCE REPORT March 15, 2021 State MarketFlorida Focus: FLORIDA Continued from Page 1 driving up costs. of a contingencyHomeowners fee multiplier. The multipli- Multiperil Insurers Groups Ranked by Total 2019 DirectThe Premium Personal Insurance Written (000) Federation of er – which can dramatically increase legal fees Florida (PIFF), the Florida Property & Casu- Mkt Loss Mkt Loss Mkt Loss – is rarely used, but insurers argue2019 that ashare 2017 Ratioalty Association2018 share andRatio the American2017 Propertyshare Ratio FloridaGroup Name Supreme Court decisionPremium that opened2019 2019CasualtyPremium Insurance2018 2018 AssociationPremium (APCIA)2017 com2017- theUniversal door Insurance for broader Holdings use Inc. means the$989,983 threat of9.8 %huge83.4 %mended$939,938 sponsor9.8 %Sen.98.6 Jim% Boyd$851,709 and the9.3 Florida% 66.8% State Farm Mutual $641,797 6.4% 41.0% $660,970 6.9% 58.4% $607,896 6.6% 55.1% attorney fees overhangs settlement negotiations, Please see FLORIDA on Page 5 Tower Hill Group $580,482 5.8% 98.3% $575,258 6.0% 145.5% $600,184 6.5% 80.8% Citizens Property Insurance Corp. $520,338 5.2% 73.8% $489,870 5.1% 75.6% $460,901 5.0% 148.8% USAA Insurance Group $398,595 4.0% 48.8% $378,257 3.9% 93.6% $390,606 4.3% 56.4% FedNat Insurance $392,612 3.9Florida% 131.4% $413,198 4.3% 151.3% $439,948 4.8% 90.4% United Insurance Holdings/UPC $387,129 3.8% 75.4% $353,797 3.7% 153.6% $314,698 3.4% 107.1% Progressive Corp. Homeowners$373,747 3.7% Multiperil87.0% $338,733 3.5 Insurers% 75.7% $317,079 3.5% 49.0% Heritage Insurance GroupsHoldings Inc. Ranked$372,415 by Total3.7% 201986.7% Direct$380,555 Premium4.0% Written91.7% (000)$393,853 4.3% 137.0% Security First Insurance Co. $352,908 Mkt3.5% Loss87.2% $345,809 Mkt3.6% 104.5Loss% $323,234 Mkt3.5% Loss98.8% 2019 share Ratio 2018 share Ratio 2017 share Ratio FloridaGroup Peninsula Name Holdings LLC Premium$325,193 20193.2% 88.52019% Premium$323,542 20183.4% 97.72018% Premium$308,429 20173.4% 115.92017% HCI Group Inc. $318,574 3.2% 57.6% $293,540 3.1% 67.7% $303,125 3.3% 90.4% Universal Insurance Holdings Inc. $989,983 9.8% 83.4% $939,938 9.8% 98.6% $851,709 9.3% 66.8% St. Johns Insurance Co. $315,876 3.1% 119.7% $274,603 2.9% 139.4% $237,168 2.6% 108.2% State Farm Mutual $641,797 6.4% 41.0% $660,970 6.9% 58.4% $607,896 6.6% 55.1% ChubbTower HillLtd. Group $301,716$580,482 5.83.0% 98.351.3% $575,258$274,280 6.02.9% 145.520.8% $600,184$268,774 6.52.9% 113.580.8% FirstCitizens Protective Property Insurance Insurance Co. Corp. $296,384$520,338 5.22.9% 73.896.3% $489,870$292,275 5.13.0% 164.375.6% $460,901$285,159 5.03.1% 148.8107.8% AmericanUSAA Insurance International Group Group $269,221$398,595 4.02.7% 48.877.2% $378,257$290,838 3.93.0% 93.692.5% $390,606$281,509 4.33.1% 100.556.4% AmericanFedNat Insurance Integrity Ins Co. of Florida $256,969$392,612 3.92.5% 131.459.3% $413,198$233,736 4.32.4% 151.3136.1% $439,948$211,956 4.82.3% 90.495.7% People'sUnited Insurance Trust Insurance Holdings/UPC Co. $173,193$387,129 3.81.7% 75.468.9% $353,797$170,328 3.71.8% 153.6133.4% $314,698$212,164 3.42.3% 107.1126.1% OlympusProgressive Insurance Corp. Co. $171,813$373,747 3.71.7% 87.077.1% $338,733$141,180 3.51.5% 113.775.7% $317,079$121,510 3.51.3% 49.091.2% AllstateHeritage Corp. Insurance Holdings Inc. $161,566$372,415 3.71.6% 86.761.6% $380,555$164,746 4.01.7% 158.291.7% $393,853$163,602 4.31.8% 137.081.4% LibertySecurity Mutual First Insurance Co. $123,263$352,908 3.51.2% 87.262.5% $345,809$128,000 3.61.3% 104.585.0% $323,234$127,213 3.51.4% 98.895.6% SouthernFlorida Peninsula Farm Bureau Holdings Casualty LLC $123,012$325,193 3.21.2% 88.576.9% $323,542$118,392 3.41.2% 192.197.7% $308,429$112,067 3.41.2% 115.9104.1% CapitolHCI Group Preferred Inc. Insurance Co $122,682$318,574 3.21.2% 119.257.6% $293,540$40,129 3.10.4% 105.867.7% $303,125$35,072 3.30.4% 90.498.0% MarkelSt. Johns Insurance Co. $120,478$315,876 3.11.2% 119.770.2% $274,603$75,513 2.90.8% 139.474.3% $237,168$24,222 2.60.3% 108.2129.6% AmericanChubb Ltd. Traditions Insurance Co. $116,931$301,716 3.01.2% 51.357.4% $274,280$101,868 2.91.1% 20.847.1% $268,774$53,654 2.90.6% 113.5156.6% TokioFirst Protective Marine/PURE Insurance Co. $108,491$296,384 2.91.1% 96.335.9% $292,275$93,023 3.01.0% 164.358.7% $285,159$81,753 3.10.9% 107.853.4% AutoAmerican Club InternationalInsurance Assn. Group (Michigan) $107,501$269,221 2.71.1% 77.261.8% $290,838$105,903 3.01.1% 92.569.3% $281,509$102,330 3.11.1% 100.576.2% NewAmerican Holdings Integrity Inc. Ins Co. of Florida $256,969$92,217 2.50.9% 142.759.3% $233,736$93,278 2.41.0% 136.1306.3% $211,956$90,803 2.31.0% 95.791.4% FloridaPeople's Family Trust Insurance Co. $173,193$91,070 1.70.9% 68.969.9% $170,328$85,284 1.80.9% 133.463.1% $212,164$86,884 2.31.0% 126.198.2% NationwideOlympus Insurance Mutual Group Co. $171,813$84,568 1.70.8% 77.158.4% $141,180$63,435 1.50.7% 113.775.6% $121,510$52,623 1.30.6% 91.296.4% SouthernAllstate Corp. Oak Insurance Co. $161,566$83,218 1.60.8% 61.662.8% $164,746$79,874 1.70.8% 158.282.6% $163,602$75,595 1.80.8% 81.468.9% FarmersLiberty Mutual Insurance Group $123,263$82,239 1.20.8% 62.519.3% $128,000$70,204 1.30.7% 85.057.1% $127,213$65,554 1.40.7% 136.295.6% OceanSouthern Harbor Farm Insurance Bureau Casualty $123,012$76,501 1.20.8% 76.975.4% $118,392$65,911 1.20.7% 192.1130.7% $112,067$62,471 1.20.7% 104.190.3% AvatarCapitol P&CPreferred Insurance Insurance Co. Co $122,682$76,122 1.20.8% 119.239.9% $40,129$73,237 0.40.8% 105.877.8% $35,072$76,651 0.40.8% 98.042.2% SouthernMarkel Fidelity Insurance Co $120,478$75,401 1.20.8% 110.270.2% $75,513$68,344 0.80.7% 106.274.3% $24,222$59,628 0.30.7% 129.6120.7% SafepointAmerican InsuranceTraditions Co.Insurance Co. $116,931$75,213 1.20.8% 100.657.4% $101,868$80,983 1.10.8% 47.191.2% $53,654$82,612 0.60.9% 156.6112.3% GeoVeraTokio Marine/PURE Holdings $108,491$72,549 1.10.7% 35.973.2% $93,023$66,972 1.00.7% 58.772.6% $81,753$67,514 0.90.7% 118.053.4% UniversalAuto Club GroupInsurance Inc. Assn. (Michigan) $107,501$70,168 1.10.7% 61.865.6% $105,903$74,369 1.10.8% 69.372.8% $102,330$70,106 1.10.8% 76.278.8% AXANew SAHoldings Inc. $69,725$92,217 0.90.7% 142.78.1% $93,278$42,668 1.00.4% 306.3-9.4% $90,803$17,949 1.00.2% 91.496.9% PreparedFlorida Family Insurance Insurance Co. $62,423$91,070 0.90.6% 116.269.9% $85,284$59,406 0.90.6% 113.563.1% $86,884$51,530 1.00.6% 109.998.2% Nationwide Mutual Group $84,568 0.8% 58.4% $63,435 0.7% 75.6% $52,623 0.6% 96.4% Statewide Totals $10,080,578 76.9% $9,632,577 103.3% $9,174,761 93.0% Southern Oak Insurance Co. $83,218 0.8% 62.8% $79,874 0.8% 82.6% $75,595 0.8% 68.9% Source: S&P Global Market Intelligence and the Property Insurance Report database. FarmersLoss ratio Insurance = incurred Group losses/direct premium$82,239 earned and0.8 does% not19.3 include% dividends$70,204 or 0.7loss% adjustment57.1% expense.$65,554 0.7% 136.2% Ocean Harbor Insurance $76,501 0.8% 75.4% $65,911 0.7% 130.7% $62,471 0.7% 90.3% Warning: Property Insurance Report is a confidential, copyrighted newsletter for subscribers only. Avatar P&C Insurance Co. $76,122 0.8% 39.9% $73,237 0.8% 77.8% $76,651 0.8% 42.2% No part of this publication may be reproduced by any form or means, including scanning or Southernphotocopying, Fidelity Insurance without Co prior permission$75,401 0.8 of% the110.2 Publisher.% $68,344 For information0.7% 106.2% call $59,628(949) 443-0330.0.7% 120.7% Safepoint Insurance Co. $75,213 0.8% 100.6% $80,983 0.8% 91.2% $82,612 0.9% 112.3% GeoVera Holdings $72,549 0.7% 73.2% $66,972 0.7% 72.6% $67,514 0.7% 118.0% Universal Group Inc. $70,168 0.7% 65.6% $74,369 0.8% 72.8% $70,106 0.8% 78.8% AXA SA $69,725 0.7% 8.1% $42,668 0.4% -9.4% $17,949 0.2% 96.9% Prepared Insurance Co. $62,423 0.6% 116.2% $59,406 0.6% 113.5% $51,530 0.6% 109.9% Statewide Totals $10,080,578 76.9% $9,632,577 103.3% $9,174,761 93.0% Source: S&P Global Market Intelligence and the Property Insurance Report database. Loss ratio = incurred losses/direct premium earned and does not include dividends or loss adjustment expense. Reprinted With Permission Of The Publisher

March 15, 2021 PROPERTY INSURANCE REPORT Page 5 State Market Focus: FLORIDA Continued from Page 4 have had the desired effect, property insurers senators for advancing the legislation, though its now face a predicted explosion of first-party final passage in the Senate and House remains lawsuits, especially for roof claims in the cen- far from certain. tral part of the state. (See PIR 11/11/19) From “They are trying to figure out the right bal- 2019 to 2020, AOB litigation for private carriers ance to get costs down while protecting the con- decreased by 37% while their overall litigation sumer,” said Logan McFaddin of the APCIA. increased by less than 1%. PIFF CEO Michael Carlson described pas- “The manmade disasters we’ve dealt with in sage of “robust attorney fee reform” as “an up- Florida have rivaled the natural disasters in Flor- hill challenge.” ida,” said Fred Karlinsky, co-chair of the insur- Opponents said the bill goes too far, creat- ance regulatory and transactions practice group ing hurdles for consumers and sharply reducing for the law firm Greenberg Traurig. “Everyone coverage with no guarantee of lower rates. Some has acknowledged that we are in crisis mode argued it would lead to more litigation, not less. now and that something needs to be done.” If the plea for property insurance reform After five years of underwriting losses, fi- sounds familiar, there is good reason. Two years nancially struggling domestic insurers are raising ago, lawmakers adopted legislation to stem a rates and withdrawing from certain parts of the flood of third-party litigation associated with state. The culprit: larger-than-expected losses assignment of benefits (AOB), mostly involving from Hurricane Irma in 2017, excessive litiga- claims for water leaks and burst pipes. Before tion – especially on roofing claims – and high re- that, lawmakers passed legislation addressing insurance costs driven by the current uncertainty. sinkhole and mold claims. While those laws Please see FLORIDA on Page 6 Florida Property Insurance Profit Margins 10-Year Summary, % of Direct Premiums Earned, With National Averages 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 Avg Total Total Total Total Total Total Total Total Total Total Total Line of Business Profit Profit Profit Profit Profit Profit Profit Profit Profit Profit Profit State Homeowner -8.9 -32.2 -17.7 19.7 27.8 31.3 33.0 30.2 25.1 23.2 13.2 21.4

Nat’l Homeowner 10.3 -2.0 -2.6 11.8 14.0 13.9 16.5 8.1 -3.8 7.2 7.3

State Fire 21.2 -1.2 -1.2 29.9 40.1 39.4 43.9 41.1 41.9 40.6 29.6 33.1

Nat’l Fire 5.8 4.8 4.7 11.0 24.2 21.4 26.9 24.7 24.8 27.6 18.3

State Comm MP -5.7 -19.5 -16.5 23.5 30.2 33.1 29.0 26.9 28.1 32.4 16.2 24.2

Nat’l Comm MP 8.2 4.1 0.6 9.8 14.5 12.4 14.9 9.0 4.1 13.2 9.1

State Allied 34.9 -12.3 -62.0 33.3 47.2 44.9 48.5 44.0 47.7 48.3 27.4 48.1 Lines Nat’l Allied 7.6 2.2 -37.6 10.6 19.2 15.7 6.3 -19.4 5.7 28.5 3.9 Lines Note: Proﬁt calculations are by Property Insurance Report using data from the National Association of Insurance Commissioners. Calculations are estimates, some based on national averages.

Page 6 PROPERTY INSURANCE REPORT March 15, 2021 FloridaState Market Focus: FLORIDA Commercial Multiperil Nonliability Insurers ContinuedGroups Rankedfrom Page by 52019 Premiums Written (000) year statute of limitations for Irma claims passed In just the first nine months2019 of 2020, Mkt FloriLoss- in September, Florida regulators increased their da-basedGroup Name property insurersPremiums had more sharethan $1Ratio bil- estimate of insured losses from the storm to Markel Corp. $119,480 8.8% 42.9% lionZurich in Insurance underwriting Group losses, almost$103,344 twice7.6 %as much32.4% $20.67 billion. asChubb the Ltd. full year 2019, contributing$91,805 to a 6.8$600% 72.2% “That gives you some context for how large millionNationwide drop Mutual in Group surplus at the $91,662end of September,6.7% 28.9% these reinsurers are viewing this uncertainty, InsuranceAmerican Capital Commissioner Assurance Corp. David$80,095 Altmaier5.9% told352.9 % and that impacts their willingness to play in our lawmakersHeritage Insurance in January. These $73,499domestic 5.4carriers% 128.1 % market, to offer those reinsurance contracts and –Tokio many Marine of Group/PUREthem thinly capitalized$58,550 and 4.3heavily% 75.0 % that capacity,” Altmaier said. Likewise, he add- Liberty Mutual $57,552 4.2% 25.3% dependentHartford Financial on Servicesreinsurance – write$57,453 84% 4.2of% the23.5 7.4% ed, capital markets that usually step up to bolster millionAXA SA property insurance policies$41,458 in Florida’s3.1% 129.3 % the capacity of struggling insurers “wonder if admittedAmerican International market. Group $39,144 2.9% 89.1% the Florida property insurance market is a good AmericanAltmaier Family Insurancerelated Groupthat a reinsurance$38,469 2.8executive% 13.5% investment.” likenedNational General the adverse Holdings Corp.loss development$35,457 in2.6 recent% 18.1 % Homeowners, if they can find coverage, Allianz Group $33,697 2.5% 186.5% yearsAspen Insuranceto Hurricane Holdings Irma Ltd. striking$31,905 Florida2.4 three% -40.0 % currently face higher prices and more coverage yearsBankers in Insurance a row, darkening prospects$31,136 for2.3 capital% 96.2 % restrictions. investmentTravelers Companies in the Inc. market. Soon$31,094 after the2.3 three-% 17.8% Last year, 55 of the 105 filings approved by Tower Hill $29,993 2.2% 98.3% the Florida Office of Insurance Regulation CNA Financial Corp. Florida$26,955 2.0% 1.7% called for rate increases above 10%, with many Frontline Insurance Unlimited Co. $25,794 1.9% 40.4% approaching 15%. In 2016, by contrast, regula- BerkshireCommercial Hathaway MultiperilInc. Nonliability$22,235 1.6 Insurers% 39.4% GuideOneGroups Insurance Ranked by 2019 Premiums$18,531 Written1.4% (000)32.6% tors received just 64 filings, and only six request- State Farm Mutual 2019$17,173 Mkt1.3% Loss56.2% ed double-digit increases, Altmaier said. Group Name Premiums share Ratio Hanover Insurance Group $16,067 1.2% 51.0% “The rate need is going to get steeper and Markel Corp. $119,480 8.8% 42.9% Centauri Insurance $14,272 1.1% 2.7% Zurich Insurance Group $103,344 7.6% 32.4% FCCI $11,493 0.9% 13.6% Please see FLORIDA on Page 7 Chubb Ltd. $91,805 6.8% 72.2% Westﬁeld Insurance $10,982 0.8% 11.0% Nationwide Mutual Group $91,662 6.7% 28.9% Church Mutual $10,716 0.8% 178.3% American Capital Assurance Corp. $80,095 5.9% 352.9% Florida 2018 Insured Auto-Owners Insurance $10,419 0.8% 46.3% Heritage Insurance $73,499 5.4% 128.1% Home Values (HO3 Policy Form) Great American Insurance $9,183 0.7% 11.1% Tokio Marine Group/PURE $58,550 4.3% 75.0% Southern Farm Bureau Casualty $8,912 0.7% 31.6% Home National Liberty Mutual $57,552 4.2% 25.3% Trisura Group Ltd. $6,138 0.5% 26.0% Value Florida Average Hartford Financial Services $57,453 4.2% 23.5% CUNA Mutual $6,089 0.5% 283.0% <$50K 0.1% 0.2% AXA SA $41,458 3.1% 129.3% Munich Re $5,843 0.4% 78.5% American International Group $39,144 2.9% 89.1% $50-75K 0.2% 0.4% Global Indemnity $5,264 0.4% 33.2% American Family Insurance Group $38,469 2.8% 13.5% $75-100K 0.5% 1.1% Fairfax Financial $4,971 0.4% 11.1% National General Holdings Corp. $35,457 2.6% 18.1% $100-125K 2.4% 3.1% Capacity Insurance Co. $4,943 0.4% 20.9% Allianz Group $33,697 2.5% 186.5% IAT Insurance $4,383 0.3% 185.7% $125-150K 6.3% 5.7% Aspen Insurance Holdings Ltd. $31,905 2.4% -40.0% Alleghany $4,369 0.3% 39.4% $150-175K 10.3% 8.1% Bankers Insurance $31,136 2.3% 96.2% Amerisure $4,317 0.3% 13.2% Travelers Companies Inc. $31,094 2.3% 17.8% $175-200K 11.9% 9.1% Conifer Holdings Inc. $3,806 0.3% 26.6% Tower Hill $29,993 2.2% 98.3% $200-300K 39.8% 32.9% Avatar P&C Insurance Co. $3,474 0.3% 12.6% CNA Financial Corp. $26,955 2.0% 1.7% $300-400K 16.3% 19.2% Everest Re $3,388 0.3% 15.4% Frontline Insurance Unlimited Co. $25,794 1.9% 40.4% $400-500K 6.0% 9.4% BerkshireStatewide Hathaway Totals Inc. $1,359,605$22,235 1.6% 39.470.3% >$500K 6.1% 10.8% GuideOne Insurance $18,531 1.4% 32.6% Source: S&P Global Market Intelligence and the Total exposures 2,903,790 48,312,844 StateProperty Farm Insurance Mutual Report database. $17,173 1.3% 56.2% Loss ratio = incurred losses/direct premium earned and does not Hanoverinclude dividends Insurance or Group loss adjustment expense.$16,067 1.2% 51.0% Source: NAIC, Property Insurance Report Centauri Insurance $14,272 1.1% 2.7% FCCIWarning: Property Insurance$11,493 Report is0.9 a% confidential,13.6% copyrighted newsletter for subscribers only. Westﬁeld No Insurance part of this publication$10,982 may 0.8be %reproduced11.0% by any form or means, including scanning or photocopying, without prior permission of the Publisher. For information call (949) 443-0330. Church Mutual $10,716 0.8% 178.3% Auto-Owners Insurance $10,419 0.8% 46.3% Great American Insurance $9,183 0.7% 11.1% Southern Farm Bureau Casualty $8,912 0.7% 31.6% Trisura Group Ltd. $6,138 0.5% 26.0% CUNA Mutual $6,089 0.5% 283.0% Munich Re $5,843 0.4% 78.5% Global Indemnity $5,264 0.4% 33.2% Fairfax Financial $4,971 0.4% 11.1% Capacity Insurance Co. $4,943 0.4% 20.9% IAT Insurance $4,383 0.3% 185.7% Alleghany $4,369 0.3% 39.4% Amerisure $4,317 0.3% 13.2% Conifer Holdings Inc. $3,806 0.3% 26.6% Avatar P&C Insurance Co. $3,474 0.3% 12.6% Everest Re $3,388 0.3% 15.4%

Statewide Totals $1,359,605 70.3% Source: S&P Global Market Intelligence and the Property Insurance Report database. Loss ratio = incurred losses/direct premium earned and does not include dividends or loss adjustment expense. Reprinted With Permission Of The Publisher

March 15, 2021 PROPERTY INSURANCE REPORT Page 7 FloridaState Market Focus: FLORIDAFlorida Fire Insurers Allied Lines Insurers ContinuedGroups fromRanked Page by 62019 Premiums Written (000) tions.Groups Some Ranked contractors by 2019 offered Premiums American Written Ex(000)- steeper, provided carriers remain2019 interestedMkt Lossin press gift cards of $200 to $3002019 as an MktincentiveLoss writingGroup Name in our market,” AltmaierPremiums toldshare the SenateRatio forGroup homeowners Name to allow aPremiums roof inspection,share Ratioand BankingSecurity First and Insurance Insurance Co. Committee.$81,120 “Many6.2% of68.7 % thenCitizens promised Property Insurance that insurance Corp. $337,179 would pay12.6 %for 42.0a % themAmerican won’t.” International Group $77,197 5.9% 56.1% UPC Insurance $315,780 11.8% 87.7% FedNat Insurance $64,262 4.9% 96.6% brandAssurant new roof even if just a$213,301 few shingles8.0% were65.8% AssurantMost of the withdrawals are$61,971 in counties4.7% 21.4% damaged.American International Group $168,990 6.3% 12.5% outsidePeople's Trust the Insurancetraditional Co. South Florida$61,739 hotbed4.7% 16.7for % Zurich“The Insurance legislature Group needs to$134,991 do something5.1% be-6.3- % hurricaneArch Capital risk and litigation. The$60,233 current4.6% prob10.9- % causeQBE these policies are being$117,672 treated like4.4% they18.1 % lemZurich centers Insurance on Group roofing claims$55,228 and litigation4.2% 29.5 in % areChubb warranty Ltd. policies where $106,492people expect4.0% a108.0 new% SCOR $52,440 4.0% -5.8% Seminole, Orange, Lake and Osceola counties, roofEverest every Re few years,” Karlinsky$83,940 said.3.1% 27.2% STARR Companies $48,835 3.7% 96.7% FM Global $82,155 3.1% -38.7% referredCapitol Preferred to as Insurance the “SOLO” Co counties$43,699 of 3.3 central% 76.6 % SwissJohn Re Tankersley, marketing$65,540 director2.5% for19.9 % Florida.Liberty Mutual $41,353 3.1% 20.8% FloridaUniversal Insurance Insurance Holdings Specialists Inc. $62,205, a large2.3 personal% 107.2% FM Global“Historically, we’ve seen $36,594carriers withdraw2.8% 17.8% linesWeston agency Insurance in Orlando, sees$60,873 the consequenc2.3% 45.4- % fromQBE coastal areas of the state$35,927 for the obvious2.7% 178.6 % esAmerican firsthand. Integrity InsHe Co.estimates of Florida that$56,815 since October2.1% 75.9 % reasonAXA SA of hurricane exposure,$35,237 but this 2.7is %a dif128.1- % 2019,Progressive his Corp.agency has had to replace$55,771 coverage2.1% 103.2 % HCI Group Inc. $30,478 2.3% 73.5% ferent kind of exposure they are withdrawing Berkshire Hathaway Inc. $54,621 2.0% 90.0% Southern Fidelity Insurance Co $30,137 2.3% 80.6% forNationwide 20,000 Mutual policyholders Group as carriers$52,394 nonrenewed2.0% -38.7% from,”Chubb Ltd. Altmaier said. $28,909 2.2% -43.5% policies.Sompo Holdings Those Inc. who aren’t losing$51,181 coverage1.9% com75.7%- UPCAs Insurance the three-year deadline$28,309 for Hurricane2.2% 92.4 % monlySafepoint face Insurance 20% Co. and 30% premium$49,311 increases.1.9% 57.4 % IrmaAmerican claims Integrity approached Ins Co. of Florida in September,$26,813 2.0 insurers% -28.9 % TighterAlleghany underwritingCorp. guidelines$40,767 make 1.5it hard% -32.0 % sawAllianz a Group surge in roof claims, fueled$22,417 by solicita1.7% 10.3- % AXIS $37,281 1.4% -37.0% Nationwide Mutual Group $22,219 1.7% 74.3% Tower Hill Please see$33,745 FLORIDA1.3 on% Page107.1% 8 Citizens Property Insurance Corp. $19,042 1.5% 53.6% Heritage Insurance $30,969 1.2% 94.0% First Protective Insurance FloridaCo. $18,854 1.4% 93.3% St. Johns Insurance Co. Florida$29,643 1.1% 130.3% Alleghany Corp. $18,064 1.4% 18.9% Travelers Companies Inc. $27,892 1.0% 20.3% Fire Insurers Allied Lines Insurers Southern Oak Insurance Co. $17,868 1.4% 65.2% RLI $25,135 0.9% -16.6% Groups Ranked by 2019 Premiums Written (000) Groups Ranked by 2019 Premiums Written (000) Progressive Corp. $17,686 1.3% 33.2% Fairfax Financial $20,963 0.8% 31.9% Universal Group Inc. 2019$17,217 Mkt1.3% Loss66.4% AXA SA 2019$20,419 Mkt0.8% -35.5Loss% Group Name Premiums share Ratio Group Name Premiums share Ratio Travelers Companies Inc. $16,821 1.3% 21.0% CNA Financial Corp. $20,209 0.8% -78.4% Security First Insurance Co. $81,120 6.2% 68.7% Citizens Property Insurance Corp. $337,179 12.6% 42.0% Fairfax Financial Holdings $15,464 1.2% 6.8% Argo Group International $20,116 0.8% 67.8% American International Group $77,197 5.9% 56.1% UPC Insurance $315,780 11.8% 87.7% Berkshire Hathaway Inc. $14,781 1.1% -23.8% Markel $19,121 0.7% 86.8% FedNat Insurance $64,262 4.9% 96.6% Assurant $213,301 8.0% 65.8% Florida Family Insurance $14,699 1.1% 48.0% FEDNAT $15,377 0.6% 0.7% Assurant $61,971 4.7% 21.4% American International Group $168,990 6.3% 12.5% Tower Hill $11,396 0.9% 26.6% HCI Group Inc. $14,503 0.5% 3.2% People's Trust Insurance Co. $61,739 4.7% 16.7% Zurich Insurance Group $134,991 5.1% -6.3% Universal Insurance Holdings Inc. $10,105 0.8% 49.0% Olympus Insurance Co. $14,069 0.5% 92.2% Arch Capital $60,233 4.6% 10.9% QBE $117,672 4.4% 18.1% Sompo Holdings Inc. $9,828 0.8% 67.7% GuideOne Insurance $13,684 0.5% 1.4% Zurich Insurance Group $55,228 4.2% 29.5% Chubb Ltd. $106,492 4.0% 108.0% AXIS $9,421 0.7% 26.5% Ocean Harbor Insurance $13,037 0.5% 86.3% SCOR $52,440 4.0% -5.8% Everest Re $83,940 3.1% 27.2% RLI $9,175 0.7% 42.7% Tokio Marine $12,324 0.5% 95.0% STARR Companies $48,835 3.7% 96.7% FM Global $82,155 3.1% -38.7% Avatar P&C Insurance Co. $8,985 0.7% 15.1% USPlate Glass Insurance Co. $10,654 0.4% 2.3% Capitol Preferred Insurance Co $43,699 3.3% 76.6% Swiss Re $65,540 2.5% 19.9% Swiss Re $7,671 0.6% 95.4% USAA Insurance Group $10,587 0.4% 84.5% Liberty Mutual $41,353 3.1% 20.8% Universal Insurance Holdings Inc. $62,205 2.3% 107.2% Munich Re $7,132 0.5% 22.4% FCCI $10,063 0.4% 19.0% FM Global $36,594 2.8% 17.8% Weston Insurance $60,873 2.3% 45.4% Safepoint Insurance Co. $7,087 0.5% 54.8% GeoVera Holdings $9,502 0.4% 64.1% QBE $35,927 2.7% 178.6% American Integrity Ins Co. of Florida $56,815 2.1% 75.9% Global Indemnity $7,070 0.5% 13.5% United Fire Group Inc. $9,342 0.4% 16.5% AXA SA $35,237 2.7% 128.1% Progressive Corp. $55,771 2.1% 103.2% St. Johns Insurance Co. $5,964 0.5% 34.8% Anchor P&C Insurance Co. $9,004 0.3% 62.6% HCI Group Inc. $30,478 2.3% 73.5% Berkshire Hathaway Inc. $54,621 2.0% 90.0% Cincinnati Financial Corp. $5,573 0.4% 7.0% Hallmark $8,675 0.3% 39.3% Southern Fidelity Insurance Co $30,137 2.3% 80.6% Nationwide Mutual Group $52,394 2.0% -38.7% ChubbStatewide Ltd. Totals $1,316,039$28,909 2.2% -43.547.1%% SompoStatewide Holdings Inc.Totals $2,670,778$51,181 1.9% 50.075.7% UPCSource: Insurance S&P Global Market Intelligence$28,309 and 2.2% 92.4% SafepointSource: S&PInsurance Global Co. Market Intelligence$49,311 and 1.9% 57.4% Americanthe Property Integrity Insurance Ins Co. Report of Florida database.$26,813 2.0% -28.9% Alleghanythe Property Corp. Insurance Report database.$40,767 1.5% -32.0% Loss ratio = incurred losses/direct premium earned and does not Loss ratio = incurred losses/direct premium earned and does not Allianzinclude Group dividends or loss adjustment expense.$22,417 1.7% 10.3% AXISinclude dividends or loss adjustment expense.$37,281 1.4% -37.0% Nationwide Mutual Group $22,219 1.7% 74.3% Tower Hill $33,745 1.3% 107.1% CitizensWarning: Property Property Insurance InsuranceCorp. $19,042 Report is1.5 %a confidential,53.6% Heritage copyrighted Insurance newsletter for$30,969 subscribers1.2% only.94.0% No part of this publication may be reproduced by any form or means, including scanning or First Protective Insurance Co. $18,854 1.4% 93.3% St. Johns Insurance Co. $29,643 1.1% 130.3% photocopying, without prior permission of the Publisher. For information call (949) 443-0330. Alleghany Corp. $18,064 1.4% 18.9% Travelers Companies Inc. $27,892 1.0% 20.3% Southern Oak Insurance Co. $17,868 1.4% 65.2% RLI $25,135 0.9% -16.6% Progressive Corp. $17,686 1.3% 33.2% Fairfax Financial $20,963 0.8% 31.9% Universal Group Inc. $17,217 1.3% 66.4% AXA SA $20,419 0.8% -35.5% Travelers Companies Inc. $16,821 1.3% 21.0% CNA Financial Corp. $20,209 0.8% -78.4% Fairfax Financial Holdings $15,464 1.2% 6.8% Argo Group International $20,116 0.8% 67.8% Berkshire Hathaway Inc. $14,781 1.1% -23.8% Markel $19,121 0.7% 86.8% Florida Family Insurance $14,699 1.1% 48.0% FEDNAT $15,377 0.6% 0.7% Tower Hill $11,396 0.9% 26.6% HCI Group Inc. $14,503 0.5% 3.2% Universal Insurance Holdings Inc. $10,105 0.8% 49.0% Olympus Insurance Co. $14,069 0.5% 92.2% Sompo Holdings Inc. $9,828 0.8% 67.7% GuideOne Insurance $13,684 0.5% 1.4% AXIS $9,421 0.7% 26.5% Ocean Harbor Insurance $13,037 0.5% 86.3% RLI $9,175 0.7% 42.7% Tokio Marine $12,324 0.5% 95.0% Avatar P&C Insurance Co. $8,985 0.7% 15.1% USPlate Glass Insurance Co. $10,654 0.4% 2.3% Swiss Re $7,671 0.6% 95.4% USAA Insurance Group $10,587 0.4% 84.5% Munich Re $7,132 0.5% 22.4% FCCI $10,063 0.4% 19.0% Safepoint Insurance Co. $7,087 0.5% 54.8% GeoVera Holdings $9,502 0.4% 64.1% Global Indemnity $7,070 0.5% 13.5% United Fire Group Inc. $9,342 0.4% 16.5% St. Johns Insurance Co. $5,964 0.5% 34.8% Anchor P&C Insurance Co. $9,004 0.3% 62.6% Cincinnati Financial Corp. $5,573 0.4% 7.0% Hallmark $8,675 0.3% 39.3%

Statewide Totals $1,316,039 47.1% Statewide Totals $2,670,778 50.0% Source: S&P Global Market Intelligence and Source: S&P Global Market Intelligence and the Property Insurance Report database. the Property Insurance Report database. Loss ratio = incurred losses/direct premium earned and does not Loss ratio = incurred losses/direct premium earned and does not include dividends or loss adjustment expense. include dividends or loss adjustment expense. Reprinted With Permission Of The Publisher

Page 8 PROPERTY INSURANCE REPORT March 15, 2021 State Market Focus: FLORIDA Continued from Page 7 expensive option when private market insurers to find coverage for all but the newest homes, are raising rates. The Florida Office of Insur- he added, with carriers eschewing 15-year-old ance Regulation (OIR) was scheduled to hold a roofs, water heaters and air-conditioning units. hearing on March 15 on Citizens’ request for a “Many companies are now saying ‘the only statewide average rate increase of 7.2%. effec- business I will write is if a house is less than 10 tive Aug. 21. State law currently bars Citizens years old; if a roof is more than 15 years old, I from raising residential rates more than 10% on won’t write that business,’” Barry Gilway, CEO any customer in a year. Citizens is also seeking of Citizens Property Insurance Corp., the OIR permission to charge actuarially sound rates state’s residual market, told lawmakers in Janu- on new business to deter growth. ary. “On average across the state, Citizens is the Placing coverage for new home sales is a least expensive company in the marketplace 91% big part of Tankersley’s business, and he said of the time,” Gilway told lawmakers. it’s never been harder. Increasingly, he’s crafting Because of its $6.4 billion surplus, Citizens solutions that include dwelling fire policies for pays far less for reinsurance than private market primary homes – though the limited coverage is carriers, making its prices more competitive. unacceptable to some mortgage lenders. “Even if I could get rates that [are] actuarially sound, I would still be below the market,” Gil- Disruptions to the insurance way said. market are becoming so severe While Citizens remains financially sound, they might threaten Florida’s continued growth and operating losses pose an real estate market. increasing risk to the market. All property, auto and other insurance policyholders are on the “This is the most volatile and the most dif- hook for assessments if Citizens exhausts its re- ficult I’ve seen the personal property insurance serves and can’t pay claims. market, worse than 2007 in my opinion,” Tank- “I believe the legislature absolutely has the ersley said. “If we don’t solve this fairly quickly, ability to bring this market back to a profitable it’s going to start to affect the real estate market.” status. But it is going to be extremely difficult The most apparent evidence of the crisis is and it’s going to take time to do it,” Gilway said. explosive growth in Citizens, which is adding “You can’t wait for another year to two years. 3,000 new customers weekly. In the last year, its You are going to have more and more compa- policy count grew 26.4% to more than 551,600 nies decide Florida is not an economic reality policies, and it expects to have nearly 700,000 for them, and they can apply their capital else- policies at year end, the highest count since No- where.” vember 2014, said spokesman Michael Peltier. Two Senate committees have taken a step Citizens had been working hard to depopulate in that direction, moving SB 76 forward. If it since peaking at 1.5 million policies in 2012. passes the Rules Committee, it would face a full “I really believe the current growth is com- Senate vote before moving to the House, where a ing from a lack of capacity in the marketplace narrower bill, House Bill 305, was introduced. regardless of price,” Gilway told lawmakers. In addition to restricting attorney fees, the “There is just no home for the business.” Senate bill would reduce the amount of time for Even without the current capacity crunch, a new or supplemental claim from three years restrictions on Citizens’ rates make it the least Please see FLORIDA on Page 9

March 15, 2021 PROPERTY INSURANCE REPORT Page 9 State Market Focus: FLORIDA Continued from Page 8 “The problem is that Florida’s one-way at- after a loss to two, and like a Texas law designed torneys’ fees provide attorneys and vendors a to curtail abusive litigation, it would require risk-free path to successfully file and recover policyholders to provide 60-days’ notice and a large amounts of money on suspect and inflated settlement demand before filing suit. claims,” he said. Under Florida law, an insurer Consumers would see a big change in the must pay all attorney fees if the court finds that terms of standard homeowners policies, which a claim was worth more than the insurer offered currently provide replacement value coverage to pay. Policyholder advocates see this as a way regardless of the age of a roof. A roof less than to level the playing field between deep-pocketed 10 years old would still have replacement cov- insurers and ordinary homeowners. erage, but claims for older roofs would follow While maintaining one-way fees, SB 76 a reimbursement schedule based on the age and would change the way attorneys’ fees are roof surface type. The reduced roof coverage awarded. Similar to the law in Texas, it would doesn’t apply in the event of a total loss. Insurers require the court to compare the judgment to the could offer replacement coverage, presumably at settlement demand and award fees based on a a higher premium, but they wouldn’t have to. formula. It also would limit the use of “contin- Insurers today can offer policies with actual gency risk multipliers” that increase fees beyond cash value (ACV) coverage as long as they also offer replacement coverage. But regulators have Proposed legislation would been reluctant to approve them, said William allow insurers to offer much Stander, executive director of the Florida Prop- less coverage for homes with erty & Casualty Association, which represents older roofs. domestic carriers. “They view it as larger public policy matter should be left to the legislature.” a reasonable hourly rate. Under federal court Opponents expressed concern that the leg- rules, judges can award the multipliers only in islation did not require rate decreases. There is “rare and exceptional” circumstances based on also fear that after a storm homeowners would evidence that competent counsel could not oth- be forced to pay as much as 70% of the cost of a erwise be reasonably retained. In Joyce v. Feder- new roof, in addition to a windstorm deductible. ated National, the state Supreme Court rejected They also criticized the 10-year term for replace- that criteria, providing trial courts more flexibili- ment coverage at a time when roofing materials ty to more than double fees. can last 25 years or more. Insurers acknowledge the multipliers are In fact, the Florida building code update that awarded only rarely, but they cite extreme cases took effect Jan. 1 improved the prospects for to illustrate why the threat can drive up settle- more resilient roofs in the future. The most sig- ments. In Santiago v. Florida Peninsula Insur- nificant addition to the code requires sealed roof ance Co., for example, Florida’s 6th Circuit decks, which can reduce water intrusion through Court in Pinellas County awarded $1.2 million a damaged roof by as much as 95%, according to in attorneys’ fees in 2019 using a 2.0 multiplier Dr. Anne Cope, chief engineer at the Insurance for a damage award of $41,000. Institute for Building & Home Safety. SB 76 would still allow judges to apply a While Stander’s group supports SB 76, he multiplier, but it would create a presumption that views the focus on roof coverage as “a solution the typical calculation is sufficient except in rare to a symptom, not a solution to the problem.” and exceptional circumstances. PIR

Page 10 PROPERTY INSURANCE REPORT March 15, 2021

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March 15, 2021 PROPERTY INSURANCE REPORT Page 11

WILDFIRE MITIGATION Continued from Page 3 PROPERTY INSURANCE REPORT homeowners and business owners for doing Established 1994 these type of updates.” Brian P. Sullivan, Editor The study also looked at the effect of reduc- (949) 443-0330 ing neighborhood building density, which Toth [email protected] described as the “least feasible” for existing Leslie Werstein Hann, Managing Editor (908) 310-7129 homes, for obvious reasons. [email protected] Reducing density also had a lower impact, Patrick Sullivan, Senior Editor likely because areas prone to wildfire risk are ‭(949) 412-5851 already less dense than places with little-to- [email protected] no wildfire risk, like city centers. The model Ed McMenamin, Senior Editor showed about 4% of homes would be saved, or ‭(217) 201-3956‬ [email protected] about $200 million, if existing neighborhoods Contributing Writer were made less dense. Elaine Silvestrini The study “is an attempt to spark a dialogue Subscription Information: (949) 443-0330 about quantification of wildfire mitigation -op On the Web: www.riskinformation.com Property Insurance Report, © 2021, published weekly, 48 times a year, by tions,” he said. “Make no mistake, we have not Risk Information Inc., 33765 Magellan Isle, Dana Point, CA 92629. It is a violation of federal law to photocopy or reproduce any part of this publication completed this work. There is a lot that remains without first obtaining permission from the Publisher. ISSN: 1084-2950 to be done. And the ultimate solution for wild- Subscription Rate: $867 per year by mail, fire risk is going to range from effective forest or contact the editor for information on management, to home and business hardening enterprise-wide electronic delivery. efforts.” PREMIUM Continued from Page 1 Toth said future research would take the detailed first look at the data in a few weeks, 0-to-30 feet of defensible space and break it into after more companies file, but this early glimpse smaller segments to see the incremental impact reveals some powerful trends. of clearing the first foot, or 5 feet, etc. Another Progressive cracked the top 10 in 2020 with project would analyze the effectiveness of dif- 15.2% premium growth to surpass Auto-Own- ferent siding materials. Since aerial images don’t ers and Erie. capture the sides of homes, Zesty would need The largest home insurer, State Farm, a partner with that data, such as Google and its stopped a nine-year run of lower market share by Street View images. growing faster than the market. Second-ranked Better siding data would also allow Zesty to Allstate, however, continued to lose share with control for that variable when evaluating roofs, 3.2% growth. since certain roof materials are often paired with Joining Progressive with double-digit growth certain sidings – houses with slate and tile roofs last year were Travelers (14.7%) and Universal usually have stucco siding, and houses with as- (17.8%). The Hartford, ranked 19th, was the phalt roofs often have vinyl siding. only top-20 with lower premium in 2020 than in “I believe that the regulators in the state of 2019, down 2.6%. California should be thinking about data … for There is a disconnect between the NAIC’s surgically targeting mitigation efforts,” Toth said. preliminary figure of 4.0% growth for 2020 and “But you want to surgically focus the dollars for our third-quarter analysis (See PIR 1/18/21), education, as well. And I believe that this data which showed stronger 5.7% growth through the is going to contribute to making sure that those first nine months. We’ll provide updates as the dollars are efficiently spent.” PIR 2020 data continues to flow. PIR