By Megan C. Johnson The Wall Street JournalThe nation’s largest wireless carrier will offer assurants renters insurance coverage for the first time in the United States, after the company said it was seeking approval from regulators for the coverage.
Verizon has been struggling to convince regulators that it can offer its own reinsurance for landlords, which some landlords have criticized as inadequate, in light of concerns about the company’s own financials.
Verizon said it had sought a waiver from the Federal Communications Commission in order to provide its own insurance.
Verizons chief executive officer Lowell McAdam said the company would offer the insurance to landlords at no cost to them, but he declined to provide details.
The company said in a filing with the Federal Insurance Office that it would begin offering the insurance coverage next month.
The move is the latest sign that Verizon is trying to get the reinsurance business right.
Verys reinsurance policies are generally lower than the industry average, and in the past few years, the company has been making progress toward offering coverage at lower costs.
Last year, Verizon said that it was considering offering reinsurance on all of its properties in California and Oregon, where it has a majority.
The state of Oregon had sought the waiver and will be among the first states to offer the policy, according to the filing.
In its filing, Verizon detailed its efforts to improve its financials and its ability to manage the reinsure program, including by using a system known as a “single-site reinsurance system” that it said would allow it to reduce the amount of time it takes for a property to become reinsured.
The system, called “simplified reinsurance,” allows Verizon to cover properties within a certain distance of each other.
The company said that the system also allows it to cover a larger number of properties, which it said will allow it “to more effectively manage risk across our property portfolio.”
Verizon said that in 2017, it managed its reinsurance program at a lower cost than the average U.S. company and was the only company in the industry to achieve a rate of $5.9 billion in annual reinsurance costs.
The average rate in the U.K., Germany and France was $10 billion.
Verions reinsurance is also cheaper than the typical residential reinsurance rate, according the company, which said that this allows it “fully to manage our reinsurance obligations in the event of a sudden and catastrophic event, such as a major fire or an earthquake.”
Verizons reinsurance will be available to landlords and tenants in three tiers: $5,000, $20,000 and $40,000.
In addition, landlords will be able to enroll in the coverage at a reduced rate of up to $5 a month.
Verity has been seeking approval to offer its reinsurer coverage for more than two years, according an internal Verizon memo obtained by the Wall Street Daily.
In the memo, Verizon senior vice president of corporate affairs, Mark A. Fiedler, said that he was optimistic that regulators would approve the coverage in its latest filing.
The carrier is looking to the insurance market for a “safe, secure, flexible” alternative to other reinsurance plans, he said.
“We know that our homeowners and renters will love it,” he wrote.
Veritans reinsurance offers are generally cheaper than most of its competitors.
In 2017, a study by Credit Suisse found that Verizons reinsurer rates were $20 per month below the industry standard.
But the study also said that there were limitations to how much coverage a tenant would receive.
The analysis was based on a comparison of insurance premiums from the five largest carriers in the market.