![]() The move raised questions at the time, but Tower Hill officials assured the market that all was well. And in May, Tower Hill Insurance Group said it had voluntarily withdrawn its Demotech rating for Tower Hill Preferred and Tower Hill Signature companies, noting that policies were being transferred into the reciprocal exchange. ![]() AM Best announced in April that it had cut the rating from B++ to B+, due in part to underwriting losses in the previous five years. It’s the second downgrade for Tower Hill Prime this year. That has left the company over leveraged with loans. Tower Hill Prime continues to face challenges in setting adequate reserves, thanks in part to the excessive litigation plaguing most Florida property insurers. AM Best said that the financials don’t look good. It could also mean trouble for policyholders who have mortgages, since secondary morgtage companies often require HO insurers to maintain top financial ratings. An appointed agent for Tower Hill said the AM Best downgrade could be “devastating” for the insurer, and would mean Tower Hill Prime won’t be able write as much business it needs to. Meanwhile, Tower Hill Prime’s stability rating by another firm, Demotech, has remained at “A exceptional,” Demotech reported. The same day that AM Best announced the downgrade, Tower Hill said it no longer wished to participate and asked that its TH Prime rating be withdrawn altogether. “The downgrade of Tower Hill Prime’s Long-Term ICR (issuer credit rating) reflects a significant decline in its overall risk-adjusted capitalization, as measured by the best capital adequacy ratio (BCAR), to the very strong level from the strongest level, coupled with continued surplus erosion and elevated financial leverage of the holding company,” AM Best said in a statement. Tower Hill has said Prime plans to exit the Florida market sometime in 2023, and its personal lines policies will be moved to the exchange. ![]() ![]() from B+ (good) to B (fair) and said the outlook for the company is negative. 28 that it had downgraded the financial strength rating for Tower Hill Prime Insurance Co. “We think it’s really just rearranging the furniture on the deck, so that maybe people won’t see how bad things are,” said Josie Novak, a financial analyst at AM Best. But AM Best said last week that the changes do little to mask deep financial problems, including shortcomings in surplus and capital. Tower Hill officials, whose Gainesville-based companies as recently as late 2021 held more than 5% of the Florida property market, have said for more than a year that policies from several TH companies are being rolled into Tower Hill Insurance Exchange, a type of reciprocal insurer. The downgrade of one of Tower Hill’s insurance companies by AM Best financial rating firm, announced the day that Hurricane Ian nosed into southwest Florida, has led to new speculation that Tower Hill could be the next insurer to falter in the Sunshine State. AM Best Says Tower Hill ‘Rearranging the Furniture ’ Faces Surplus, Capital Problems ![]()
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