Over 90K policies shifted to private insurers as part of ‘depopulation’ effort by Citizens.

Private insurers have once again acquired a substantial number of policies from Florida’s Citizens Property Insurance Corp, marking the second consecutive month of such a trend. In the latest round, seven carriers have taken on a total of 92,886 policies, as part of a concerted effort to reduce the number of homes insured by Citizens. While initially established as an insurer of last resort, Citizens has experienced a surge in policy count over the past three years due to financial troubles in the private market.

As of Friday, Citizens reported a total of 1,255,381 policies, a decrease from the previous week’s count of 1,344,353 policies. This decline represents the lowest policy total since April, following a peak of 1.412 million policies earlier this fall. The ongoing shift of customers from Citizens to private insurers is a strategic initiative known as “depopulation,” which involves private insurers seeking approval from state regulators to assume policies from Citizens. In mid-October, five insurers successfully assumed 99,773 Citizens policies, and further policy takeouts are scheduled for December and January.

Citizens spokesman Michael Peltier expressed optimism about the increasing interest among private insurers to expand their business in Florida through Citizens’ depopulation program. Peltier stated, “This is an encouraging sign that the market is improving.” The depopulation process involves regulators approving the maximum number of policies that each insurer can assume. For example, in the recent round, regulators authorized the seven insurers to take up to 202,000 policies, yet the actual number acquired by these companies amounted to less than half of that figure.

Among the insurers, Homeowners Choice Property & Casualty Insurance Co. assumed the highest number of policies, specifically 53,456. HCI Group, Inc., the parent company of Homeowners Choice, revealed that the insurer had received approval to take up to 75,000 policies and extended offers to 72,958 property owners. HCI’s chairman and CEO, Paresh Patel, attributed the company’s success to their technology’s identification of attractive policies for assumption and the competitive pricing and expanded coverage offered to policyholders compared to their existing Citizens policy.

Other insurers involved in the depopulation effort include Florida Peninsula Insurance Co., which assumed 11,862 policies, and Monarch National Insurance Co., which took on 11,715 policies. SafePoint Insurance Co., Slide Insurance Co., Loggerhead Reciprocal Interinsurance Exchange, and Edison Insurance Co. also participated, assuming 6,870, 6,515, 1,520, and 948 policies, respectively.

The motivation behind moving customers from Citizens to the private market stems from concerns among state leaders. They fear that policyholders across the state, including those without Citizens policies, could be burdened with the responsibility of paying claims in the event of a major hurricane or multiple hurricanes. However, the lower premiums charged by Citizens often reduce the incentive for customers to leave the state-run insurer.

To facilitate the depopulation process, lawmakers implemented a change last year requiring Citizens customers to accept coverage offers from private insurers if the offers are within 20 percent of the cost of Citizens premiums. Consequently, homeowners must accept an offer that is 19 percent higher than their Citizens premium, while they are not obliged to accept an offer exceeding 20 percent of their Citizens premium.

The recent round of depopulation demonstrated significant variations between the maximum numbers of policies approved for insurers and the actual number of policies assumed. For instance, Slide Insurance Co. was authorized to take up to 50,000 policies but ultimately acquired 6,515 policies. Similarly, Edison Insurance Co., which had authorization for up to 5,000 policies, ended up assuming 948 policies.

The depopulation of Citizens continues to be a crucial step in shifting homeowners from state-run insurance to the private market. While challenges remain, the recent surge in private insurers’ interest in assuming policies from Citizens indicates positive developments in Florida’s insurance market.