Posted on: Friday, November 12, 2004

Insurer stops writing new Florida policies

Associated Press

NEW YORK — Stung by more than $1 billion in losses from this year's hurricanes, Allstate Corp. has stopped writing new homeowners' insurance policies in most of Florida until the state legislature makes some decisions about sharing future storm risks.

Allstate's chief executive officer, Edward Liddy, told reporters yesterday that the company lost $1.06 billion as a result of hurricanes Charley, Frances, Ivan and Jeanne hitting the southern United States, much of it in the company's Allstate Floridian unit.

The losses, he said, "wiped out all the profits" the unit had made on its Florida policies since Hurricane Andrew hit the state in 1992.

The New Jersey-based Insurance Services Office Inc., an actuarial firm, estimates that the four hurricanes cost property and casualty insurers a total of $20.5 billion, just over the $20.3 billion that Andrew cost in inflation-adjusted terms.

Earlier this month, Allstate, the largest property casualty insurer in Florida, said it was tightening guidelines on new policies. Allstate, which is based in Northbrook, Ill., is one of the nation's largest home and auto insurers.

Liddy said that while Allstate Floridian was renewing existing policies, it wasn't writing new ones in most of the state until legislative issues were resolved.

The Florida legislature plans a special session next month to consider changes in property insurance laws. Florida's governor, Jeb Bush, and the state's chief financial officer, Tom Gallagher, are pushing to change a law that now lets insurance companies charge separate deductibles for damage from different storms in the same season.