Increased litigated claims in Florida force United Insurance to strengthen reserves
United Insurance Holdings Corp (UPC), the property and casualty insurance holding company, has reported a significant increase in litigated claims volume from Florida homeowners’ during the first quarter of 2021 compared to prior periods.
The increase led to actual loss reserve development exceeding its expectations across most accident years, UPC warned. UPC will strengthen its reserves for unpaid loss and loss adjustment expenses on prior accident years by $30 million, or approximately $24 million after tax, for Q1 2021, it said.
UPC said it expects to report catastrophe losses of approximately $24 million before tax, net of expected reinsurance recoveries, which includes claims related to from Winter Storm Uri.
Brad Martz, president and chief financial officer at UPC, said: “We anticipated the unfavorable trend of litigated homeowners claims in Florida continuing in 2021, but the actual number of new lawsuits filed during the first quarter was extremely disappointing and requires us to re-estimate our ultimate loss liabilities due to the overall increase in loss severity.”
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