A new report recently has come out prepared by Weiss Ratings. Weiss is a company that rates the financial strength of insurance companies and unlike others ratings, they do not accept money from carriers to adjust their status. Interesting results for sure. First off, State Farm of Florida was rated one of the four weakest insurance companies in the State. The interesting part of that equation is that State Farm of Florida sent $215 million last year to its parent company, State Farm Mutual. State Farm Mutual made a profit of $1.8 billion in 2010 making it one of the top four strongest insurers in the nation. That $1.8 billion was double what they made in 2009, only a meager $777 million.
The second largest private insurance carrier in Florida, Universal Property and Casualty received a “very weak” rating from Weiss primarily because the management fails to set aside enough money in reserves to pay claims. Universal apparently still retains over $100 million in capital and claims paying reserves. Weiss also made note that Universal’s chief operating officer made $6.7 million in 2010, up from $2.5 million in 2009. The chief executive officer was paid $4.6 million, up from $3.4 million in 2009. This amount is apparently more that 89% of other executives at 18 other similar sized insurance companies.
Neither State Farm nor Universal Property and Casualty commented on the ratings with State Farm only briefly stating that Weiss does not have access to all of the carrier’s information other than what is filed with the state so Weiss’ numbers are unreliable and inaccurate.
Homewise Insurance and Edison Insurance were the only two carriers that showed up under the $5 million capital requirement here in Florida.