Weekly Focus Idea: American Integrity Insurance

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Weekly Focus Idea: American Integrity Insurance

C O M P A NY N O TE

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3. Concentration in Florida: A large amount of American Integrity’s written premium comes

from Florida. This concentration exposes American Integrity to regulatory risk, market risk

and competition in the State of Florida.

4. Catastrophe Loss Risk: Because of the exposure of its property and casualty business

to catastrophe events, specifically severe hurricanes, American Integrity’s operating results

and financial condition may vary significantly from one period to the next. Its liquidity could

be constrained by a catastrophe or multiple catastrophes, which may result in extraordinary

losses or a downgrade of its financial strength ratings. In addition, the reinsurance losses

that are incurred in connection with a catastrophe could have an adverse impact on the

terms and conditions of future reinsurance programs. Property insurance in Florida, by its

very nature, mean that underwriting profits are volatile and more volatile than other lines of

insurance. Florida property writers tend to make very high returns on equity in years

without hurricanes and can lose money in years of multiple large hurricanes. Most Florida

writers assume one or two major hurricanes per year in their pricing and reinsurance

purchases. This means that the main risk for Florida writers is many large hurricanes in a

single year.

5. Regulatory: The Florida insurance market has a long history of regulatory changes that

have been both helpful and harmful to insurers. In recent years, Florida regulators are

perceived to be more focused on supporting insurance company solvency and a stable

insurance market, but in the past the department has taken on a more active consumer

focused approach.