My postings on this blog site are often driven by my opinions. Opinions based on facts from everywhere and input from anyone in command of those facts.
In this report on Peoples Trust (PTIC) I’ll stick only to the facts and comments (good and bad) from others and refrain from personal speculation, (yes, it’s possible).
You decide what it all means, if anything. Feel free to share your thoughts with a published response below or an email to me directly.
Much of the chatter about PTIC has subsided at this point. Terminated agents have retooled. Those who never signed up are done saying “I told you so!”
The regulator, the media, even cancelled policyholders appear to have moved on.
I’ve been in contact with PTIC executives who, like founding father Michael Gold, were forthcoming and helpful. In this instance, I’ve received thoughtful explanations with traditional insurance buzz words, including: “temporary”, “limited”, “diversification”, “balance”, “optimization”, and…”prudent exposure management”. You can read the full written rendition here.
But, here’s the net. The company’s customer count has more than doubled since July 1 of last year, when state records show it had a little more than 53,000 policies. In Palm Beach County, for example, it climbed from 10th in market share with a little more than 10,000 policies last July 1 to seventh with nearly 13,000 customers three months later.
Then, for the last 3 or 4 months the company’s total insured value (TIV) had grown by 10%. It felt the cost of reinsurance at the top end (above levels purchased from its own captive & the CAT fund) would be excessive. Thus it sought to proactively level out the “growth trend” and the resulting “PML” before discussions on its 2014 reinsurance.
In the tri-county area of Dade, Broward and Palm Beach one decision was to temporarily cease accepting new policies and to selectively cancel a percentage (about 400) still within the initial 90-day discovery period. Another 770 direct policies were cancelled after signing up via CSR’s on the telephone–a total of 1,170.
This included terminating about 54 tri-county agencies with approximately 2600 policies in force. Some agencies were already under “evaluation” and would have been culled anyway. The total universe of all cancellations and non-renewals involved with this activity, which will be staggered over the next twelve months, is 6800.
Of PTIC’s total 125,000 policies about 65,000 were in the tri-county market. Some of which would’ve been cancelled anyway when an inspection revealed they fell short of existing guidelines.
One source has also reported PTIC will cease its direct mail campaign in the tri-county area and delay participation in the Citizens Clearinghouse until further notice. It may also limit coverage to homes built in 1994 and newer and reduce the maximum limit of Coverage A. I did not ask the company for confirmation of this, however, and suspect it could change anyway.
Of course, some cast these happenings in a more critical light.
One cancelled customers’ lamentation appeared in the Sun Sentinel:
It looks like People’s Trust Insurance Co. is up to shenanigans again. They have a history of poor business practices that upsets customers — if what I Googled is true.
I am upset because they canceled my new homeowner’s policy after only 90 days. I smell a rat here, either with People’s or Tallahassee, for letting such shenanigans continue. Since the hurricanes, I have had nothing but problems with my homeowner’s insurance: five cancellations, six different carriers (Citizens twice), exorbitant rate hikes and changing inspection requirements.
I have spent more than $5,000 to upgrade my house — new garage door, new outside regular doors, new skylights, new shutter on my front door. I even had to put a shutter on my garage-wall doggie door.
Living in Florida is becoming a nightmare.
John Castleman, Palm Beach Gardens
Then there are those who can always be counted on to expand every carrier move beyond logical boundaries.
Attorney Nicole Vinson with the Merlin Law Group was quite critical of PTIC in her blog post titled “Does People’s Trust Recognize It Can’t Handle a Hurricane?” She referred to PTIC’s Rapid Response Team (RRT) as “..a way to skate out on paying valid insurance claims…”
Consider the source on this one. But…I promised the good and the bad and in Vinson’s post you’ll find links to pieces from both the media and others at the Merlin Law Group.
NOTE: Before publishing these last two negative points of view I asked PTIC’s Mark Bowsher if he would like to comment via an end note to this blog. You can read his response here.
That’s it.
For what it’s worth, company officials don’t deny the hardships but admit to being surprised at the negative reaction, which has simmered. Besides, as I was reminded….”It’s less than 5% of our book and, our top agents applaud what we’re doing.”
To those asking if this is a sign of things to come or if the Rapid Response Team or other PTIC innovations may soon fall to the wayside I can only say…
…these are some very good questions!
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Scott…thank you very much for this insightful piece. One of the things that concerns me regarding PTIC is their continued solicitation of the public. Their mailers are quite expensive before adding to the cost of actually sending them. Meanwhile, I have had friends here in Pinellas County that have called PTIC as a result of the mailer only to find out that PTIC does not write in their zip code. My question: Why does PTIC spend good money to send mailers to ineligible zips? The Post Office can target specific zips and PTIC could use those excess $$ to buy additional reinsurance or, heaven forbid, keep in surplus!
Like I said…”these are some very good questions”. I’m sure they’ve done what they can to keep marketing expenses at a minimum but maybe your comment will cause a review. This is one of the reasons many companies use independents exclusively. Local Agent advertising and marketing is the best bargain carriers have, it costs nothing beyond the base commission and can generate huge numbers in targeted areas. It’s the kind of numbers that resulted in PT having to cut back so much in Palm Beach, for example.
Thanks for the info Johnson Strategies gives on Insurance today. The RRT sounds like an interesting idea. Even though retired, I still appreciate my 60 years in Property and Casualty Insurance.
I don’t have a great deal of enthusiasm for the RRT idea. There are lots of reasons carriers have not gone to this approach prior, dating back to the founding of insurance in the American colonies. Having said that, it it works as it should after a major storm I could become a believer.