HomeWise Sells Its Louisiana Homeowners Policies

HomeWise Insurance Co. has sold its Louisiana homeowners policies to Lighthouse Property Insurance Corp. as the company continues to divest assets following its sister company being placed into liquidation in Florida.

More than 11,000 policies, representing in-force premiums of about $25 million were transferred to Lighthouse. Terms of the deal were undisclosed. Starting Jan. 1, the policies will be renewed on Lighthouse paper, according to Lighthouse.

"We expect this transition to go very smoothly as virtually all of the HomeWise agents are also Lighthouse agents," said Ron Chapman, Lighthouse president, in a statement. He said the acquisition re-affirms the company's commitment to the Louisiana homeowners market.

Attempts to get additional comment were unsuccessful.

Lighthouse was the 25th-largest homeowners insurer in Louisiana last year, with a 0.87% market share, according to BestLink. It is a Louisiana-domiciled company, and had $22.8 million in direct premiums written in 2010, up from $12.8 million in 2009. It had a net loss of $277,000 in 2010, down from a profit of $328,000 a year prior.

Earlier, up to 70,000 HomeWise Florida homeowners policies were acquired by Homeowners Choice (Best's News Service, Nov. 10, 2011). Homeowners Choice Chief Executive Officer Paresh Patel said during a conference call that HomeWise was "effectively exiting the Florida business, the Florida insurance market."

HomeWise Preferred Insurance Co., an affiliated company of HomeWise Insurance, recently was placed into liquidation. HomeWise Preferred, which primarily wrote homeowners insurance coverage, stopped writing new and renewal policies a year ago. The last policy expired in June, and there are no known policies-in-force. HomeWise Preferred became insolvent because of sinkhole-related claims (Best's News Service, Sept. 6, 2011). Sinkhole claims more than tripled in Florida between 2006 and 2009, according to a study last year by the Florida Office of Insurance Regulation. The OIR reported that 66% of claims are concentrated in three counties -- Hernando, Pasco and Hillsborough. However, there is an increase in reported sinkholes in parts of south Florida, including Miami-Dade and Broward counties, where sinkholes historically haven't been an issue.

The top five homeowners multiperil insurers in Louisiana last year were State Farm Group, with 28.63% market share; Allstate Insurance Group, with 13.41%; Liberty Mutual Insurance Cos., with 6.52%; Louisiana Farm Bureau Mutual Insurance Co., with 5.79%; and Louisiana Citizens Property Insurance Corp., with 5.29%, according to BestLink.

(By Rick Cornejo, managing editor, BestWeek: [email protected])