Reactions to a recent Wall Street Journal article, which faulted the Demotech rating agency for giving top marks to a number of insurance carriers before the insurers went insolvent in recent years, has been mixed and muted.
After outrage from carriers, regulators and agents in 2022, when Demotech surprised the industry with unofficial warnings that some 16 Florida insurers were in financial trouble, concerns about the rating agency seemed to be old news.
“I don’t have any comment on the WSJ article. There isn’t anything new on that topic,” said Kyle Ulrich, president and CEO of the Florida Association of Insurance Agents, a group that had posted an angry letter about Demotech and its methodology in 2022.
Ulrich told the Wall Street Journal this week that some of Demotech’s ratings downgrades have come late in the game — often less than a year before an insurer’s collapse. That has “absolutely made a lot of people in Florida’s insurance market question ‘what does this [rating] really mean?’” Ulrich said.
Many Florida insurance agents have long regarded Demotech’s rating system as “a…