Quantcast

New Questions about Banks' Force-Placed Insurance Deals

Print
Email
Reprints
Twitter
LinkedIn
Facebook
Google+
Partner Insights

Because state limits on Assurant's pricing restrict the commissions it pays to bank clients, a case can be made that Assurant's regulated status is a competitive disadvantage.

"If there's the ability to write coverage on a nonadmitted basis, then definitely there's an advantage to a company like QBE," said David Blades, an insurance analyst for A.M. Best.

QBE's deal for Balboa, which generated $1.5 billion of gross premiums last year, would make it one the biggest force-placed insurers in the U.S. It's unclear how the company will manage its future force-placed sales in Florida and elsewhere once the purchase is complete. Belinda Miller, a deputy commissioner of the Florida Office of Insurance Regulation, said she doubted QBE would switch Balboa's existing force-placed portfolio over to surplus lines, though she said the company has not indicated its plans.

Neither QBE nor Bank of America, which will distribute its insurance, offered any comment. But insurance industry analysts said they believed QBE was in the middle of a big push to expand its market share.

"I think when the Balboa deal closes we'll get a better sense of how they're looking at this short and long term, of how they're going to attack the market," Blades said.

SEE MORE IN

RELATED TAGS

Eight Reasons the Housing Recovery's Been So Slow

From tight credit conditions to empty nesters, here is a litany of problems weighing on the housing market, as summarized in the minutes of last month's Federal Reserve policy meeting.

(Image: iStock)

TWITTER
FACEBOOK
LINKEDIN
Already a subscriber? Log in here
Please note you must now log in with your email address and password.