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State Farm Florida rating lowered

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The Tampa Tribune

Published: June 19, 2009

TAMPA - One of the nation's top insurance rating agencies is concerned about State Farm Florida's ability to pay claims after a major catastrophe.

A.M. Best Co. has downgraded State Farm Florida's financial strength to fair and lowered its credit rating.

Best's negative outlook is based on the company's decision to stop selling property insurance in Florida. State Farm is taking in far less money in premiums as it stopped writing new policies.

The company does not have the money to cover expected losses from a major catastrophe, Best analysts said. They expect State Farm's parent company would infuse enough money to pay clams.

A State Farm spokesman said the company is not surprised by the downgrade.

"It is an unfortunate but understandable consequence of the environmental challenges facing Florida property insurers," Justin Glover said.

Baird Helgeson

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