#USA #Columbus #Demotech #Litigation Funding #Homeowners' Insurance

Demotech, Inc.: Leading Change in Homeowners' Insurance Availability and Affordability

Demotech, Inc. has made significant strides in advocating for the enhancement of homeowners' insurance access and affordability, concluding the year 2025 with impactful initiatives. The company has taken on a pivotal role in analyzing and rating state specialists, who represent approximately 23.6% of insurers providing data to the National Association of Insurance Commissioners (NAIC). These state specialists possess a profound understanding of their respective markets and frequently collaborate with leading reinsurers globally to ensure adequate catastrophe reinsurance protection. This collaboration is essential in fortifying claims-paying capacity, particularly during natural disaster scenarios.

Moving beyond traditional methods, Demotech's approach also emphasizes the importance of raising awareness on the financial implications of waste, fraud, and abuse within the insurance sector. The company has spearheaded research to expose the online business model that has led to increased litigation frequencies, driven by tech-enabled litigation instigation. This paradigm shift has resulted in significant investments—amounting to tens of billions of dollars—in third-party litigation funding, which has correspondingly raised the stakes for the insurance industry.

Joseph L. Petrelli, the President and Co-founder of Demotech, has articulated the company's commitment, stating, "As we close out 2025, our advocacy has led us directly against powerful plaintiff attorney firms and the third-party litigation funders reaping profits from this contentious landscape. We firmly believe that the profits garnered from third-party litigation funding should be subjected to universal taxation. Looking forward to 2026, we will persist in our mission to educate and elucidate the adverse effects of this previously concealed tactic which has amplified the psychosocial costs of claiming processes, ultimately exacerbating insurance access and affordability challenges."

Established in 1985 and based in Columbus, Ohio, Demotech, Inc. has been a frontier organization in delivering independent Financial Stability Ratings® (FSRs) for various segments of the insurance ecosystem, including property and casualty insurers, life and health insurers, and title underwriters. Notably, Demotech is recognized as the first entity to have its rating methodology formally approved by Fannie Mae, Freddie Mac, and the U.S. Department of Housing and Urban Development (HUD). By offering FSRs to insurers of all sizes, Demotech plays a critical role in leveling the playing field within the insurance market.

As of July 11, 2022, Demotech has garnered registration as a nationally recognized statistical rating organization (NRSRO) by the U.S. Securities and Exchange Commission, further establishing its credibility in the insurance landscape.

Stakeholders interested in the latest Financial Stability Ratings can visit Demotech's Official Website, where in-depth information regarding the methodologies and procedures employed for these assessments is also available.

With an emphasis on transparency and integrity, Demotech, Inc. not only seeks to enhance the financial stability of insurance companies but also reinforces its commitment to making homeowners' insurance more accessible and affordable for all policyholders, thereby fostering a more resilient insurance environment for the future.