UPC unlikely to rebound, lays off 70+ workers

Experts say the future of United Property and Casualty Insurance Company, known as UPC Insurance, is bleak and is likely to become the sixth insurer in Florida to meet its demise this year. 

St. Petersburg-based UPC Insurance’s parent company announced last week that its Demotech financial stability rating was being withdrawn after seeing a downgrade, and its personal lines subsidiary UPC carrier would pull out from its operations and go into an orderly run-off.

The filed plans state UPC would withdraw its personal line businesses from Florida, Texas and Louisiana, and is also reportedly intending to withdraw from New York as well.

The decision has ultimately resulted in UPC laying off at least 77 local employees out of roughly 500 employees, Mark Friedlander, Insurance Information Institute (Triple-i) director of corporate communications, told the St. Pete Catalyst. According to multiple posts on LinkedIn from now-former UPC employees, the layoffs started last week. 

A notice from UPC to the Florida Department of Economic Opportunity indicating the layoffs has not yet been published (if it was indeed filed). 

Concerning the company’s future, UPC Chairman and CEO Dan Peed explained, “Due to significant uncertainty around the future availability of reinsurance for our personal lines business, I believe placing United P&C into an orderly run-off is prudent and necessary to protect the company and its policyholders.

“The company is actively pursuing opportunities to leverage our people, technology, and other capabilities. Our commercial business continues to perform well and provides the company a stable platform to build new engines of growth and profitability.”

Prior to the withdrawal, UPC consolidated its Florida businesses and was undergoing a reorganization in an effort “to stop the bleeding.” 

The news of the withdrawal may force the majority of UPC policyholders to move their coverage soon to an “A” rated carrier, Friedlander said, noting Fannie Mae and Freddie Mac, the quasi-governmental corporations that purchase mortgages from lenders, will not back loans if they do not have a high rating. 

While it was an abrupt move to pull out of multiple states, experts say the writing was on the wall, especially as last year, the company suspended its new homeowners’ business in Florida.  

“UPC was not generating new premium and now this run-off of its existing business will deplete all of their revenue,” Friedlander said.

“We are very concerned that the run-off plan is not a realistic roadmap,” he said, explaining the company could be declared insolvent and ordered to liquidate. 

UPC has not responded to a request for comment regarding its employees and future in St. Pete. 

UPC’s quarterly reports have also reflected the insurer’s downward spiral, reporting a $33 million loss in the first quarter, as well as a $59.9 million loss for 2021 and a $95 million net loss in 2020.

Earlier this year, United sold several of its parcels in St. Petersburg across from its headquarters at 800 2nd Ave. S.to an LLC connected to the St. Pete-based Moyer Law Group, in a $4.2 million deal.

This year, UPC, which had roughly 185,000 policies in Florida as of March 31, also sold its National Flood Insurance Program to Texas-based Wright National Flood Insurance Company for $3.6 million.  

Local companies recruit UPC talent

There are a number of insurance and insurtech firms throughout Tampa Bay seeking highly skilled workers which could conceivably recruit the affected UPC workers. 

Tampa-based insurtech firm Slide said it has hired five employees directly from UPC and will likely add more to its team. 

Slide is a rapidly growing local company that recently completed an acquisition from St. Johns Insurance Company, which serves Florida and South Carolina.

The acquisition took the startup from closing its oversubscribed $100 million Series A funding to $400 million in annual revenue within three months.

Tampa-based TrustLayer also said it is growing its headcount, and the talent from UPC could be part of that growth. 

“At TrustLayer we provide technology to quickly validate the trust needed to work together. A major component of establishing that trust is insurance verification – and we need the best talent available from around the world to fulfill that mission. So, in that spirit we are certainly looking to capitalize on any opportunities to bring the best people to TrustLayer – be they local, as is the case here, or otherwise,” said Don Halliwell, head of marketing.