St Johns Insurance Co. has received approval for $20 million loan from Florida earmarked for new homeowner capacity across the state. The note is the first such transaction resulting from the Senate Bill 1980 passed by the Florida State Legislature and signed by Governor Jeb Bush into law May 16.
The “Insurance Capital Build-Up Incentive Program,” administered by the State Board of Administration, was enacted as an incentive to Florida homeowner insurers, credit worthy and in good standing, able to demonstrate a stable business plan and ability to repay the State over a 20 year term. The insurer must commit to writing homeowner
policies in Florida, and must match the state’s loan with new capital investment. The qualified company must then possess a minimum of $50,000,000 policy holders’ surplus.
“The program could not have come at a better time for Florida homeowners and insurers,” James McCahill, St. Johns president and CEO said. “St. Johns was founded in 2003 and began writing homeowner business in January 2004.
“Right out of the chute we were hit with the 2004 and 2005 storm seasons. While not a desirable start for any business, we were very proud of our claims response in each season, and never considered deviating from our strategy and business plan,” he explained. “We re-capitalized and pressed on. Our reinsurers and agency network have been supportive and loyal. Our client renewal rate has been consistently in the 95 percent range.”
McCahill said the company had to modify its business plan due to dramatically increased costs.
St Johns writes in 64 counties in the state of Florida and currently insures over 100,000 policies.
“Unfortunately, we have had to stop writing in a number of counties due to saturation and lack of capacity,” McCahill explained. “This strengthening of our surplus will allow us to re-open those counties previously closed and provide substantial additional capacity throughout the state.
“We expect to write in excess of 100,000 new policies in the next 12 months, or in excess of 200,000 by December 2007,” McCahill predicted.
Source: St. Johns Insurance Co.
Was this article valuable?
Here are more articles you may enjoy.