Florida Citizens expects depopulation to accelerate in 2024: CEO
Presenting to the Florida House Insurance and Banking Subcommittee yesterday, Tim Cerio, the CEO of Citizens Property Insurance Corporation, said that depopulation efforts are expected to accelerate this year, while the ultimate goal is to reduce the policycount to around 400,000.
The Florida Citizens depopulation program sees private market insurers making offers to Citizens policyholders to try and encourage them back to the private market.
In 2023 there was a significant uplift in depopulation activity, with a number of high-profile companies such as Slide and HCI Group.
During his presentation to the House Insurance and Banking Subcommittee yesterday, Citizens CEO Cerio said that around 200,000 policies were taken out in 2023, law firm Greenberg Traurig, LLP has reported.
Florida Citizens ended 2023 with some 1.23 million policies in force and $553 billion in exposure.
Cerio said that Citizens currently projects that by the end of 2024, around 338,000 policies and $185 billion in insured value will have been removed from their market via the depopulation program.
Cerio said that interest is higher in takeouts because there is good business in the Citizens portfolio and that market conditions have improved.
He noted that the transfer of policies to the private market has caused capital to begin to flow in Florida’s property insurance market, which he said is one good sign of recovery.
In addition, Cerio cited the establishment of a number of new Florida focused property insurers, the fact other private market insurers are expanding their businesses in the state, that reinsurance was generally more available at the 2023 renewals and importantly that Citizens’ own new non-catastrophe litigated cases filed through July 2023 were down 20% compared to a year earlier, while there have been significant reductions in the 2023 accident year litigation rate and also in the the Assignment of Benefit (AOB) rate.
All of which paints a picture of a market perhaps stabilising, which bodes well for future appetite to assume risk in Florida, as well as for Citizens chances of downsizing more.
The ultimate goal is to return Florida Citizens to a situation where it is truly a residual market, with a sweet spot of around 400,000 policies in-force, Cerio said.
Since the reforms to Florida’s property insurance legislation, Cerio said that some 81,000 policyholders have received offers from private market insurers with renewal premiums that offered less than what they pay with Citizens, Greenberg Traurig reported.
Cerio also said that there is a projected drop expected of 76,000 policies in January and that additional depopulation is scheduled for some commercial lines policies in February.
As we reported recently, there are some efforts to enact new laws that could drive some more risk into Citizens and these measures continue to be debated, so Cerio’s update for this import House Subcommittee could be timely, by helping to shed some light on the state of the market in Florida and the importance that Citizens continues to revert back to its role as residual property insurance provider.
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