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NU Online News Service, Oct. 28, 11:42 a.m. EDT
Florida Chief Financial Officer Alex Sink urged insurers at an industry conference today to consider entering Florida’s huge home insurance market.
According to an advance text of her remarks, she said that “instead of three companies with 30 percent each of the [Florida] risk pie, as risk managers and leaders, doesn’t it make more sense to spread that risk among more providers?”
“I believe that if I were the CEO of a major insurance company, I’d be thinking this way,” said Ms. Sink, a former bank president, The CFO, who spoke at the annual meeting of the Property Casualty Insurers Association of America (PCI) in Orlando, outlined efforts she has made to have the legislature improve Florida’s insurance marketplace and told her audience that “I want us to work together to create a regulatory environment.”
Ms. Sink said she understood that many firms belonging to PCI don’t write insurance in Florida, “and of greater concern, that many others have stopped writing here and can’t make the business case to return.”
The CFO told them “that’s unfortunate for all of us. Florida has the ninth-largest volume of insurance premiums in the world--a larger volume than Texas, Canada and even China.”
After a fact-finding mission to Lloyd’s of London when she took office in 2007, Ms. Sink related, she unsuccessfully pushed for legislative measures to move $3 billion of exposure back to the private market.
Following a similar trip last year to Bermuda, Ms. Sink said, she had suggested reducing the state’s Hurricane Catastrophe Fund exposure, changing the setting up of reinsurance coverage to fall from spring, and gradually returning the state-created Citizens Property Insurance to insurer-of-last-resort status.
She noted that recently, the legislature had removed the company’s rate freeze. “I was encouraged that the legislature took some meaningful steps to lower Florida’s hurricane insurance risk this session, but I remain very concerned about the amount of hurricane risk we shoulder as Floridians,” she said.
Ms. Sink noted that in her state, which has an 11 percent unemployment rate, “our residents simply can’t afford large premium increases.”
However, she added, “I believe the [private] market has the ability and the capacity to manage the risk our state could face.”
Ms. Sink, who is a candidate for governor in next year’s August Democratic primary election, said that with her business background, “I know that everyone wins, especially Florida’s consumers, when there is strong competition and real choice.”
“So, if your company writes insurance in Florida, or would like to write here, I look forward to working constructively with you to build a healthy property insurance market here and reduce our overall exposure risk.” she added.