Exclusive Survey: Agents React to State Farm Florida Pullout

Article

Insurance Journal surveyed 130 Florida insurance agents on the expected exit of State Farm Florida. Here’s some of what they said:

62% expect State Farm will exit while 32% think it could still stay.

Comments:

—”This is a high-stakes game of chicken. State Farm is trying to force the state’s hand, while leaving their customers hanging.”

—”I do not think it is a bluff on either part.”

—”[F]rom what I have seen they are only purging their book of the older homes and less desirable risk homes and expect to reach an agreement with DFS and stay and they will have cleaned their book of property business up as all companies wish they could do.”

—”I think rates will increase and everybody will be happy but the insureds.”

84.6% are already receiving calls from State Farm customers.
93% are interested in writing some of the State Farm business.
52.8% believe they will be able to save most State Farmers money.
To attract State Farm business: 59.8% are increasing their marketing and 25% are seeking additional carrier appointments. Other steps they’re taking: adding sales staff (9.8%), adding support staff (13%), partnering with a State Farm agent (22.8%) and making surplus lines contacts (8.7%).
What will happen to State Farm Florida’s business?
37.7% believe the state’s private insurers will handle the bulk.
44.6% believe the majority will end up in state-backed Citizens.
36.2% think State Farm agents will represent other carriers.
37.7% believe the state’s surplus lines market will gain business.

Comments:

—”I have a real problem recommending that people leave State Farm, an A-rated company, and going with Citizens, a bankrupt company that would not be allowed to operate if they were not a state run company. I also have a problem recommending an Excess and Surplus company or a non-rated company instead of State Farm.”

—”This will put an added burden on a property market that will not be able to handle the claims that will come if we get hit by a large Cat 3 or above storm.”

—”The biggest issue with State Farm’s book of business is the loyalty that its clients have to them. While they have written very little new business in the last 17 years (since Andrew) the book has continued to age. Many of these homes are 50 years old or more and the admitted markets do not look at these favorably, so they may not fight for it. Meanwhile, Citizens is wide open for it with an inspection.”

—”I think we may see some new companies coming in to take over some of the State Farm business.”

—”State Farm agents will try to re-write into Citizens to further anger the state.”

—”My concern is how much capacity do the smaller companies have and can they absorb the majority of the business?”

Was this article valuable?