Allstate is further distancing itself from Florida's troubled property insurance market, changing the name of its Allstate Floridian subsidiaries to Castle Key, the Northbrook, Ill., insurer said Thursday.
Allstate spokesman Nick Halliwell said the name change "helps people understand that these are companies that are separately capitalized from Allstate Insurance Co."
The insurer had established Allstate Floridian Insurance and Allstate Floridian Indemnity as separately capitalized companies after Hurricane Andrew in 1992. The creation of separate Florida entities, a move replicated by several large insurers outside the state, was a way to protect the parent company and policyholders outside Florida from paying for extensive hurricane damage.
Until now, however, Allstate leveraged its brand name in marketing the company.
Halliwell insisted the move is not a precursor to pulling out of Florida or reducing its homeowners insurance business in the state. He said that, to his knowledge, there is no plan to spin off or sell the two Florida companies.
To the contrary, he said, Allstate plans to keep its pledge to Florida regulators to write 50,000 new homeowners policies and 50,000 new renters and condo policies over the next three years. The insurer has about 225,000 property insurance policies statewide.
Separately, Allstate is shutting down its much smaller Encompass insurance subsidiary in Florida, which writes fewer than 11,000 policies. It began sending out nonrenewal letters to Encompass customers in February.
Allstate's 1,100 agents in Florida will continue to write business under the Castle Key name and service existing contracts, Halliwell said, and its auto insurance will retain the Allstate name.
"We anticipate a seamless transition for customers," said Mike Sheely, Allstate Insurance's field vice president in the Florida region. "While the names of these companies have changed, our commitment to Florida customers has not."
Allstate filed for the name change in May with the Illinois Department of Insurance. After approval, it sought and received the blessing of the Florida Office of Insurance Regulation.
Office of Insurance Regulation spokesman Ed Domansky called the change "just a business decision made by the company. To speculate as to why they did it? It isn't our place to do that."
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