An insurance carrier that shed 24,000 policies before the hurricane season avoided going into receivership with an injection of capital from HSCM Bermua, which will take on majority ownership. | By Andrea Booher, FEMA/Wikimedia Commons
Two affiliated Florida insurance carriers that appeared headed for receivership instead will get a capital infusion from Hudson Structured Capital Management, which will take on majority ownership in return.
Hudson, in its re/insurance business HSCM Bermuda, said in a release that it would take majority ownership of Southern Fidelity Insurance Co. and its affiliated entities on or about Nov. 12. Those entities include Capital Preferred Insurance, which owns Southern Fidelity.
Southern Fidelity and Capital Preferred had filed for significant rate increases in recent months to cover the costs of their business, but Artemis reported that wasn’t enough and the Florida Office of Insurance Regulation (OIR) was going to put them into receivership unless an investor was found.
HSCM Bermuda will take an active role to maintain and expand Southern Fidelity’s footprint in the Florida, Louisiana and South Carolina homeowners’ insurance markets.
”2020 has been a challenging year for the Southeast homeowners’ insurers,” Edouard von Herberstein, partner and chief underwriting officer – HSCM Bermuda, said in the release. “As rates and the underwriting environment begin to improve, we are excited to support Southern Fidelity as they rebuild.”
With Florida OIR’s approval, Capitol Preferred dropped almost 24,000 policies just in advance of the hurricane season, a move called “extraordinary” at the time, Artemis reported. And a few weeks ago Demotech pulled its Financial Strength Rating for Capitol Preferred.
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