Texas Homeowners Market Tightens As More Carriers Withdraw

Two more insurance carriers, Union Standard and Ohio Casualty, have announced their withdrawal from personal lines in the Texas market, according to the Independent Insurance Agents of Texas (IIAT).

Union Standard’s withdrawal from the Texas homeowners market will take effect Jan. 1, unless the Texas Department of Insurance (TDI) acts on behalf of Union Standard agents and IIAT to extend that date by at least four months.

Craig Sparks, regional vice president of Union Standard, told IIAT that the company is approaching other carriers to find a replacement homeowners market. So far, the best Texas Homeowners Market Tightens As More Carriers Withdraw candidate looks to be Farmers Mutual Protective Assn. of Temple, rated “A” by A.M. Best and with some $46 million in premium.

Farmers Mutual Protective president James May noted that the company’s surplus could absorb all of Union Standard’s business: “There is a strong possibility we will take over a large portion of their business.”Farmers Mutual Protective’s subsidiary, Priority One Insurance Co., writes HO-B policies through about 50 agents.

IIAT president Ken Kapelka expressed the association’s support for Union Standard’s right to withdraw from personal lines in a letter to the TDI, but said, “We do not believe sufficient notice has been provided to agents who must find a replacement market.” After reviewing Union Standard’s withdrawal plan on Nov. 13, the TDI scheduled a conference call with the company on Nov. 27 to assess its progress finding new carriers for its business. The company had $8 million in auto and $7 million in homeowners premium written through 35 agencies last year.

Ohio Casualty had $2 million in auto and $14 million in homeowners premiums last year. After reviewing options with the TDI, the company will set an effective date for its withdrawal.

The IIAT presented more evidence that its members are encountering more and more difficulties finding HO-B coverage for clients due to carrier restrictions. A survey sent to IIAT’s 1,500 member agencies Sept. 28 shows 57 percent reported a “very significant effect”—the most serious of five options offered—on their business due to limitations on new HO-B policies. Renewal of HO-B policies, however, is not seen as a major problem yet—only 36 percent of the survey respondents said they were seeing a “significant effect” or a “very significant effect” on HO-B renewals from underwriting changes.

Topics Carriers Texas Agencies Homeowners