Florida’s Citizens Property Insurance Corporation announced Jan. 20 that it has reduced its policy count to under 500,000.
The company said in a statement that its policy count on Jan. 19 was 484,788, the lowest level recorded since Citizens was created in 2002. Total exposure has shrunk to $143.53 billion. The Florida Legislature created Citizens, a not-for-profit alternative insurer, to provide insurance to property owners who cannot find coverage in the private insurance market.
Citizens said it is benefiting from a reinvigorated private insurance market, affordable reinsurance and favorable weather and has been able to return to its role as the state’s insurer of last resort.
“This marks an important milestone and the culmination of efforts from all Citizens’ stakeholders,” said Chris Gardner, chairman of the Citizens Board of Governors. “Much of the credit needs to go to the private property insurance market, which under the watchful eye of the Office of Insurance Regulation has grown strong over the past several years. State leaders also need to take a bow.”
Following 10-years with no major hurricane, Florida’s private property insurance market has returned to health, aided by the availability of affordable reinsurance. In October, all 67 Florida domestic property insurers passed a stress test administered by the Office of Insurance Regulation that simulated various hurricane scenarios including a repeat of the 2004 hurricane season.
Citizens’ policy count over the years has fluctuated in response to changing market conditions. Following periods of increased hurricane activity or other market disruptions, Citizens policy count has risen. The last peak occurred in 2012 as Citizens approached 1.5 million policies and more than $500 billion in exposure.
By law, Citizens is required to levy assessments on Florida policyholders if it exhausts its ability to pay claims. In 2011, Florida policyholders faced a potential assessment of $11.6 billion in the event of a 1-100 year storm. Citizens eliminated the risk of such an assessment in 2015.
Barry Gilway, Citizens president, CEO and executive director said the results exceed expectations.
“These results were accomplished by dedicated Citizens staff who worked closely with 23 companies on the depopulation program and 14 companies on the Clearinghouse program over the past few years,” said Gilway.
Source: Citizens Property Insurance Corp.
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