The ink was still wet when I began hearing from agents, and others, on my post about changes at Peoples Trust. It seems that, according to the OIR’s most recent report, the Complaint Ratio for Peoples (5.44) is worse than any other carrier, including Citizens (1.0234).
Of the top 50 writers based on premium volume, a total of 14 company’s also had a complaint ratio worse than Citizens which ranked 15th.
In addition to Peoples the top five included: Florida Peninsula, Hartford Ins. Co of the Midwest, Southern Oak, and Universal which has about 8% of Florida’s homeowners market. Looking only at the top 50 writers based on premium volume, the company with the best complaint ratio was Fireman’s Fund which, along with 90 other carriers had a complaint ratio of 0.000. There are a total of 169 carriers on the report many with insubstantial premium volume or with zero complaints, or both.
Caution: no carrier I talked to cares much for this report and all of them complain about the screening and classification of complaints and/or the possible misuse or misunderstanding of the data, (See NOTE #1 below).
Brent Winans with Clear Advantage Risk Management produced a summary of the complaints for the top 50 writers which may be helpful as it explains the OIR’s approach while touching on some of the pro’s and con’s of the report.
One “con”, in my opinion, may be timeliness–this report was dated 11/18/11 and is for complaints filed during the 2010 calendar year. The value of data that old needs to be carefully considered before too many conclusions are drawn.
None the less…both the criteria and the data collection are identical for all property carriers, yet…as one agent noted, Peoples was distinguished in the last two reports as follows:
“For the 2009 calendar year, the FL OIR stated that People’s Trust had a complaint ratio of 3.50. That means that, compared to all other homeowner carriers in the state, they had 3.5 times more complaints than the average carrier with the same market share. That complaint ratio won them the prize of having the highest complaint ratio of any of the top 50 homeowner insurers in the State in 2009.
The good news for 2010 is that the number of complaints fell from 68 in 2009 to 23 in 2010, while their premium writings increased slightly from $36.3M to $37.9M. The bad news is that they fared even worse when compared to other carriers, whose complaints fell even farther. Peoples Trust’s complaint ratio in 2010 went up to 5.44. I have not done all the analysis, but that again puts them near or at the top in customer complaints for the year.”
So, the logical next question is…”why?”
It’s natural to look at the unique things Peoples Trust does to explain its unique position with respect to complaints; that means its Rapid Response Team (RRT).
Recall, its policyholder’s must pledge to use the company’s in-house repair facility (RRT) for any property losses–they can’t select their own contractor or use the claim check for something else.
In fact, since no checks are cut no bids are necessary but Mike Gold (President & CEO) told me his 24/7 repair team always defers to the homeowner on workmanship and results. This is why he says Peoples receives “…so many accolades…” for both quality and promptness in claims handling.
In fact, he states the complaints appear to come more from those who want to be paid the full amount and don’t necessarily want their damage repaired.
Translation, the fraudsters.
In this regard, he also noted…“Public Adjusters hate us because they know they’re not needed.”
In addition to responding in writing to four specific questions from me, Mike Gold also admitted that some of the complaints may be residual to People’s less than stellar entry to the Florida market. This resulted in stiff regulatory sanctions in 2009 that could have impacted policyholders on the books in 2010.
There’s also this.
During the period in question Gold said Peoples was still using its MGA exclusively; no agents were appointed. By contrast, other carriers (upon which the ratio is based) would have some complaints fielded and handled by agents; which complaints don’t reach the regulator. Peoples Trust is now using agents (See NOTE #2 below).
In any event, my goal here is neither to defend nor accuse–just to report; which I have done.
The questions I sent to Mike Gold along with his written response and analysis of Peoples complaints can be found under the “Library Tab” above or by clicking here.
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NOTE #1: The OIR is required by FS– §624.313 to publish statistics and ratios on the complaints consumers submit against insurance companies. A “Complaint” is any written communication by an insured or named beneficiary expressing dissatisfaction with an insurance entity over which the Office has regulatory authority. This does not include complaints against an incorrect entity, complaints for properly filed or approved rates, suspected fraudulent claim complaints or complaints that are duplicative or frivolous. OIR extracts these numbers from the NAIC database. NAIC receives the data from the DFS and standardizes the definition of complaints across 50 states.
NOTE #2: According to Mike Gold his company’s appointment of independent agents is ahead of schedule–he now has 50 agency appointments, double the number planned for year-end 2012. Interested agents can call Peoples Trust marketing VP, Mark Bowsher at 561-417-1132.
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