In a strategic move to mitigate risks and manage policy numbers effectively, Florida’s Citizens Property Insurance Corp. observed a significant decline in its number of insured policies, with expectations to drop below the one million mark.
By late November, Citizens Property Insurance Corp., Florida’s state-backed insurer, had managed to reduce the number of policies to 987,744, with projections indicating a further decrease to approximately 907,000 by year-end. This reduction is part of a broader effort to resituate policies into the private market, a process known as ‘depopulation.’
The ‘depopulation’ strategy saw 237,323 personal-line policies and 1,527 commercial-line policies transferred to private carriers during October. This transition involved 12 participating insurance companies, five of which are newcomers to the market this year.
Jeremy Pope, Chief Administrative Officer of Citizens, highlighted the industry’s resilience, especially given the challenges posed by recent hurricanes such as Debby, Helene, and Milton. Pope noted, ‘These are definitely telling signs of an active market continuing on the right path.’
Looking ahead, there is potential for an additional 343,000 policies to be absorbed by private carriers by February. The overarching aim is to reduce Citizens’ exposure and liability, which has grown in recent years due to instability in the private insurance sector. At its peak, Citizens insured 1.412 million policies, making it Florida’s largest property insurer.
State officials stress the importance of minimizing Citizens’ policy numbers due to the financial strain that could result from future hurricanes. In instances where Citizens might fall short of funds to cover claims, the burden could extend to policyholders statewide, who might have to contribute through ‘assessments’ to bridge any financial gaps.
The ongoing efforts to diminish the policy count at Citizens Property Insurance Corp. underscore the state’s commitment to stabilizing its insurance market while reducing potential financial liabilities. As the program progresses, the outcome will play a crucial role in Florida’s ability to manage insurance risks effectively, especially in light of intense storm activities.
Source: Floridarealtors
