Ratings agencies say St. Petersburg insurer isn’t financially healthy

ST. PETERSBURG — Insurance ratings agencies lowered their assessment of a St. Petersburg insurer’s financial health last week, citing losses from severe storms last year.

AM Best downgraded American Capital Assurance Corp.’s rating from an “A-,” which is considered excellent, to a “C,” which is not, calling its financials “very weak.” American Capital is a commercial property insurer that writes policies for buildings such as condos and apartment complexes, as well as commercial flood insurance. It has customers in Florida, Texas, Louisiana, Georgia and the Carolinas, with fewer than 2,000 policies in Florida.

Demotech Inc., which rates many of Florida’s carriers, withdrew its rating for the company, which was previously an “A,” at the company’s request.

American Capital did not respond to requests for comment by email and phone.

The driving reason for the downgrade was losses from severe weather in 2020, particularly in Louisiana. Last year, the gulf state was hit by five named storms, including Hurricanes Laura, Delta and Zeta, as well as Tropical Storms Cristobal and Marco.

American Capital is currently taking claims for damage sustained during the historic winter storm in Texas, according to its website.

The significant drop in ratings is unusual, said Mark Friedlander, Florida representative for the Insurance Information Institute.

“(It’s) clearly a precarious position for the company,” he said.

The downgraded ratings mean independent insurance agents likely won’t write policies for American Capital until the ratings are improved.