Insurer redlines new business in South Fla.

 

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MIAMI – April 23, 2014 – People’s Trust Insurance Co., already canceling thousands of policies before hurricane season, is now telling agents not to write any new business in Palm Beach, Broward and Miami-Dade counties “effective immediately.”

That’s a change from three weeks ago, when The Palm Beach Post reported the Deerfield Beach-based carrier said it was still writing policies in South Florida despite dropping thousands of its 115,000 customers, less than 90 days after many signed up.

One of the state’s fastest-growing property insurers, People’s Trust told agents: “As part of our ongoing exposure management strategy to more appropriately balance and diversify our portfolio of risk throughout Florida, effective immediately People’s Trust will not be accepting new business in Miami-Dade, Broward, and Palm Beach counties.”

The decision “is associated with the development of the company’s comprehensive reinsurance program in advance of the 2014 storm season,” the bulletin said. Reinsurance is back-up coverage insurers buy to help pay claims after storms.

The notices began going out to agents Thursday and Friday, a spokeswoman said.

In early April, The Post reported People’s Trust abruptly dumped customers in Palm Beach County and other parts of South Florida, in many cases less than three months after homeowners signed up. That sent infuriated customers scrambling to find new coverage ahead of hurricane season June 1. Fewer than 5 percent of its 115,000 customers were affected, company officials said.

The company’s customer count has more than doubled from about 53,000 last July. It’s been a time of big change for the company founded in 2008 by CEO Mike Gold, who died in his sleep at age 60 in January. The insurer has since pulled back to trim risk exposure.

In Palm Beach County, the customer base has climbed from about 10,000 policies to 16,000 customers in less than a year, ranking among the top seven insurers in the market.

Heritage Property & Casualty Insurance Co. of St. Petersburg, another fast-growing insurer, said last week it is writing no new business in 18 South Florida ZIP codes in Palm Beach, Broward and Miami-Dade counties.

Heritage has grown from zero to 133,000 customers in less than two years.

Copyright © 2014 The Palm Beach Post (West Palm Beach, Fla.), Charles Elmore. Distributed by MCT Information Services.

Stronger home sales should follow a tepid spring

 

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NEW YORK – April 23, 2014 – Despite weak underlying consumer momentum this spring, U.S. housing should improve later in 2014 due to faster economic growth, according to Fitch Ratings in the latest edition of the “Chalk Line.”

“Comparisons have been a challenge so far this year, with most housing metrics falling short of expectations from a year ago,” said Robert Curran, managing director and lead homebuilding analyst for Fitch Ratings. “Though the severe winter throughout much of North America has restrained some housing activity, buyer sensitivity to home prices and finance rates and the slowing of job growth at year-end is resulting in diminished consumer momentum.”

That said, Fitch expects stable ratings for most issuers within the homebuilding sector in 2014, reflecting a continued, moderate cyclical improvement in overall construction activity as the year progresses. There is even potential for a few upgrades among some homebuilders.

Housing should improve in 2014 due to faster economic growth and some acceleration in job growth, despite somewhat higher interest rates, as well as more measured home price inflation.

However, Fitch is tapering its year-end forecast to reflect a subpar spring selling season. Single-family starts are now projected to improve 15 percent to 710,000 as multifamily volume grows about 9 percent to 335,000.

Overall, Fitch predicts that total starts this year should top one million. Fitch projects new home sales will increase about 16 percent to 500,000 and existing home sales to remain flat at 5.10 million. This is largely due to fewer distressed homes for sale. New home price inflation should moderate in 2014, at least partially because of higher interest rates. Average and median new home prices should rise about 3.5 percent in 2014.

© 2014 Florida Realtors®

Senate holds Miami Beach hearing on climate change

 

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MIAMI BEACH (AP) – April 23, 2014 – South Florida officials testified Tuesday before a U.S. Senate subcommittee that they’re already shouldering the burdens of rising sea levels and they need state and federal partners to do more to help adapt their coastline to the effects of climate change.

U.S. Sen. Bill Nelson, D-Fla., was the only member of the Committee on Commerce, Science and Transportation’s subcommittee on science and space to make the trip to Miami Beach City Hall.

“I specifically wanted to come here because this is ground zero. When there’s high tide, there’s flooding. It’s real, and yet some of my colleagues in the Senate deny it,” said Nelson, who added that viewing the Earth from space while he was an astronaut changed his perspective on environmental issues.

Miami Beach, a barrier island with an average elevation of 4.4 feet above sea level, already suffers street flooding from seasonal high tides even on calm, sunny days. Upgrades to the city’s stormwater system to improve drainage and reduce neighborhood flooding are expected to cost up to $400 million.

Miami Beach commissioners voted earlier this year to consider higher tides and rising sea levels when planning projects. Mayor Philip Levine said the city is too valuable to lose, with real estate worth more than $23 billion and tourism revenue over $9 billion.

“Sea level rise is a reality in Miami Beach. We’re past the point of debating the existence of climate change and are now focusing on adapting to current and future threats,” Levine said.

According to a regional agreement to adapt to climate change, the waters off South Florida could rise up to 2 feet by 2060. The state is particularly vulnerable to rising sea levels because its porous limestone foundation has the structure of Swiss cheese, allowing water to seep up through the ground and flood roads and outdated sewage systems.

The city of Fort Lauderdale has estimated that it could cost $1 billion to upgrade its stormwater system, and pumps to replace water control structures that rely on gravity, which won’t reduce inland flooding when sea levels rise, can cost $50 million each, said Broward County Commissioner Kristin Jacobs, a member of the White House Task Force on Climate Preparedness and Resilience.

Megan Linkin, the natural hazards expert at the global reinsurance company Swiss Re, testified that climate change and extreme weather make coastal infrastructure very vulnerable, and some assets might become uninsurable if their premiums rise too high for consumers to pay.

Some environmental advocates worry that the government’s failure to enforce stringent guidelines for adapting infrastructure to climate change could end up costing taxpayers more money for more repairs after disasters such as Hurricane Katrina or Superstorm Sandy.

“In order for our coastal communities to become resilient, we’re going to have to have federal legislation and federal funding and state funding, but only for those designs that are designed to save the taxpayers from another hundred-billion-dollar hit after the next Sandy,” said Albert Slap, an attorney who has been working with the Biscayne Bay Waterkeeper to try to force government officials to explicitly account for sea level rise in plans for $1.6 billion in repairs to Miami-Dade County’s crumbling sewer system.

Nelson seemed to agree, though he didn’t specify that legislation or funding is imminent.

“The federal government certainly needs to step up and do its part. We need to lead the way and cut down on pollution from cars and power plants,” he said.

Copyright © 2014 The Associated Press, Jennifer Kay. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.