MetLife Auto & Home said it is cutting back on writing new home insurance in New York City and surrounding counties, a move that was greeted with concern by area insurance agents.
Ellen Kiehl, assistant executive director of the Professional Insurance Agents of New York, said the MetLife move, coupled with a similar announcement by Allstate two months ago, could create capacity issues in the state, possibly forcing some policyholders to look to the nonadmitted and ultimately the residual market for coverage.
MetLife sent notices earlier this week to agents requiring prior underwriting approval before any agent could bind coverage on Long Island, New York City, Westchester, Putnam and Rockland counties.
Joe Madden, spokesman for the Cranston, R.I.-based company, said: “We must limit new-business homeowner sales to manage our concentration of business to ensure that we are not unduly impacted in a particular area should a large event, such as a hurricane, strike.”
Mr. Madden stressed that the company does not plan any cancellations and “our current policyholders will continue to receive homeowner insurance from the company.”
The Allstate and MetLife moves have come in the wake of catastrophe modelers' projections concerning possible losses if a major hurricane strikes the Northeast, which is viewed as statistically probable in the near future.
The last Category 5 hurricane to hit the area with major impact struck Long Island in 1938.
Ms. Kiehl said that while Allstate prohibited new policies, the MetLife guidelines merely require prior approval and some form of pre-inspection before binding.
She also observed that she has heard that Allstate is starting not to renew some policies.
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