Florida’s High Net Worth Homes Worth the Risk for Ironshore

The high net worth property insurance market in Florida has certain characteristics, like quality construction, which makes the risk acceptable to Ironshore Inc. as it enters the Sunshine State.

"There is not a glaring void in the market but there is an opportunity and we will see how it progresses," Shaun Kelly, Ironshore chief executive officer of U.S. operations, told BestWire.

Ironshore was "up and going" as of May 1 and already there has been a good response, Kelly said. The company will approach the marketplace from a surplus lines basis. Surplus carriers cover high-risk businesses and their employees as well as boats, homes, condominiums and mobile homes. About 40% of the business is personal lines and 60% is commercial.

Surplus carriers have never been governed by the same laws as traditional insurers, but by a special Surplus Lines Law, which allows for more freedom on policies and rates because these carriers insure the higher risk. Florida has a last-resort insurer, but does not service high-value homes.

Ironshore's entry into the personal lines segment is a "viable alternative for clients," Kelly said. Ironshore distribution is done through the broker market. The program in Florida is a partnership with wholesale insurance intermediary, Hull & Co. Kelly said the announcement is part of a fulfillment of earlier comments he has made about organic growth within Ironshore in the United States. He said the company could get into one or two new businesses in the coming year and no acquisitions are currently in the pipeline (BestWire, May 17, 2010).

Kelly said Ironshore will carefully spread throughout the state, "remaining open and available while monitoring and measuring exposure" to ensure the company is not over-concentrated in any one area of hurricane-prone Florida.

Vice President Daniel Olmsted is going to lead the charge in Florida, having served as president of private risk services at Ace before joining Ironshore.

In January 2009, Ironshore Inc., launched a joint venture with C.V. Starr. Iron-Starr Excess will act as a specialty lines insurance and reinsurance managing general agency, operating from Bermuda, according to BestLink, which provides online access to A.M. Best's Global Insurance & Banking Database.

Members of the Ironshore Insurance Group currently have Best's Financial Strength Ratings of A- (Excellent).

The top five writers of homeowners multiperil in Florida in 2008, according to BestLink, which provides online access to A.M. Best's Global Insurance & Banking Database, were: State Farm Group, with a 17.7% market share; Citizens Property Insurance Corp., with 16.2%; Universal P&C Insurance Co., with 7.2%; USAA Group, with 5.1%; and Tower Hill Group, with 4.5%.

(By Chad Hemenway, associate editor, BestWeek: [email protected])