Louisiana Citizens Insurance Depopulation Highest in Five Years

December 12, 2013
Declining Graph

The total policy count for Louisiana Citizens Property Insurance Corp. (Citizens) is dropping below 95,000 personal and commercial policies following the latest round of the Citizens depopulation program, the Louisiana Department of Insurance announced.

Insurance Commissioner Donelon said Citizens’ homeowners market share is predicted to drop to an estimated 2.7 percent, ranking it ninth in market share size in Louisiana at year’s end.

Each year Citizens opens its books of business during depopulation and offers its policies to the voluntary market. Companies are allowed to review the policies and select those that they would like to pull out of Citizens and write on their own paper.

Over the seven rounds of the Citizens depopulation program, Citizens has reduced its policy count by a total of 88,805, which represents a 51 percent decrease from the all-time high of 174,000 policies.

In this round, Citizens reports 14,268 residential (personal lines) policies are being transferred to the private insurance market from Louisiana’s property insurer of last resort through three companies. Citizens policy count will drop to below 90,000 residential policies and to approximately 93,000 total policies, including commercial.

This success in the Citizens depopulation program indicates ongoing and significant improvement in the recovery of the Louisiana property insurance market post-Hurricanes Katrina and Rita in 2005.

Citizens’ market share peaked at 9.8 percent in 2008, which ranked it the third largest homeowners group in Louisiana at that time. Its market share dropped to 6.4 percent in 2009 to 5.3 percent in 2010 and to 4.1 percent in 2011. It reduced further in 2012 to 3.0 percent.

According to Commissioner Donelon, Louisiana has 18 new carrier groups in the state since Hurricanes Katrina and Rita, giving homeowners a broader range of options for insurance. The Citizens depopulation program has utilized 12 of those companies writing in our homeowners market.

The three companies successfully making offers to write homeowners policies currently written by Citizens are Access Home Insurance Co., Maison Insurance Co. and Lighthouse Property Insurance Corp. All three companies have previously participated in Citizens’ depopulation process. They also generally offer the same coverage as Citizens or better coverage and for a lower rate, the department said.

Altogether, 40,419 unique policies were requested by these companies and 14,268 policies were authorized to be moved.

Citizens’ policyholders who authorized their policies moved to another company have 60 days to decide whether they prefer to remain with Citizens beginning on the assumption date of Dec. 1, 2013. In prior rounds, typically less than two percent of Citizens policyholders opted out and chose to remain with Citizens.

In the six previous rounds of Citizens depopulation, Citizens saw the following reductions in policy counts: round one – 26,595 policies on June 1, 2008, round two – 13,343 policies on Dec. 1, 2008, round three – 3,368 policies on April 1, 2009, round four – 13,466 policies on Dec. 1, 2010, round five – 10,890 policies on Dec. 1, 2011 and round six – 6,877 policies on Dec. 1, 2012.

Source: Louisiana Department of Insurance

 

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