TALLAHASSEE – Private insurers pulled more than 275,000 policies last year from state-owned Citizens Property Insurance Corp. and have taken in nearly 115,000 this year, with Citizens President and CEO Tim Serio saying Wednesday that he thinks we’re “coming through the other side” after years of trouble in the market.
Citizens, which was founded as an insurer of last resort, has risen in the past few years to become the state’s largest insurer as private carriers turned away customers and raised rates due to financial problems.
But after the Legislature approved a series of changes to try to shore up the market, private insurers took 275,324 policies to citizens in 2023 through a so-called “depopulation” program. By comparison, private carriers took out 16,408 policies in 2022, 2,814 policies in 2021 and 7,463 policies in 2020, according to data presented Wednesday during a meeting of the Citizens’ Council of Governors.
State leaders have long sought to minimize the number of policies at Citizens, at least in part because of financial risks if the state is hit by a major hurricane or multiple hurricanes.
“We think the market will continue to recover, capital will continue to flow into the Florida market,” Serio told the Board of Governors. “So we’re pretty optimistic. We (citizens) have very good policies. The market is interested in our business. And this is again a sign that the market is getting stronger.”
Citizens reached 1.412 million policies in the fall of 2023 before seeing reductions due to the depopulation program. Still, Citizens remains the state’s largest insurer with about 1.172 million policies as of Friday.
It also sees regular weekly increases in policy numbers, which partially offset large batches of policies exiting through attrition. For example, Friday’s total of 1.172 million was up from 1.167 million policies a week earlier and 1.162 million policies two weeks earlier.
In depopulation, private insurers seek approval from regulators to underwrite a certain number of policies for citizens. The large number of policies that have flowed into the public in recent years has created a situation where private insurers can look for policies that they consider to be good risks.
In 2023, Slide Insurance Co. has taken out the most Citizens policies, with 82,781, according to Citizens data. Slide was followed by Homeowners Choice Property & Casualty Insurance Co., which picked up 53,456 policies; SafePoint Insurance Co., which took 41,895; and Florida Peninsula Insurance Co., which took 37,586.
Citizens said 114,559 policies were taken out by private insurers this year.
While the depopulation program has resulted in many homeowners getting private coverage, that doesn’t necessarily mean they’ll see lower insurance rates — and they could face paying more.
Seeking to spur depopulation, lawmakers in 2022 approved a change requiring Citizens customers to accept offers of coverage from private insurers if the offers are within 20 percent of the cost of Citizens’ premiums.
For example, if a homeowner receives an offer of coverage from a private insurer that is 19 percent higher than the Citizens premium, the homeowner will have to accept it. If the offer was more than 20 percent of Citizens’ premium, the homeowner would not have to accept it.
Also, people who stay with Citizens shouldn’t expect to see reduced rates as the market improves, officials say. That’s because Citizens has long argued that the state’s cap on how much it can raise premiums each year has led to rates that aren’t actuarially sound.
