[4] Demotech was founded in 1985[1][2] to provide financial analysis of, and actuarial services for, niche markets ignored by Big Three (credit rating agencies).

[7] The U.S. Securities and Exchange Commission provides a list of nationally recognized statistical rating organizations on its website.

Because newly capitalized insurers do not have the financial records typically utilized, a new process was developed using business plans; pro forma financial statements; administrative agreements; marketing and sales materials; job descriptions of key personnel; investment policy statement; claims department procedures and practices; initial rate, rule, and form filings; biographies of critical employees, service providers and principals; reinsurance data; Catastrophe modeling reports; and Underwriting guidelines and application.

On March 23, 2022, the top five executives from Demotech sent a letter to Florida's Governor Ron DeSantis plus the Senator and House leadership entreating them to pass reforms before the start of Atlantic hurricane season on June 1.

The letter stated: "The conditions of the property insurance marketplace in Florida are unsustainable, and without the necessary corrective action, many Florida insurers will struggle to maintain adequate surplus, efficient capital sources will avoid the market, private reinsurance costs will become prohibitively expensive, and consumers will ultimately bear the cost.

The resulting paper was "A Comprehensive Examination of Insurer Financial Strength Ratings," and its executive summary contained the following conclusions:[7][4] In 2023, researchers from Columbia Business School, Harvard Business School, and the Federal Reserve Board examined the quality of Florida property insurers rated by Demotech versus traditional rating agencies, and found:[15] Demotech has published Performance of Title Insurance Companies since 1988.