Guest AuthorThe 2013 Atlantic hurricane season officially comes to a close at midnight on Saturday, November 30, and Mother Nature has again spared Florida from a major storm. Here at Citizens Property Insurance Corporation, we have been busy taking advantage of that good fortune.
Citizens’ overall exposure has dropped 33 percent in the past 15 months, while our policy count has fallen a remarkable 28 percent over the past year. As the season draws to a close, Citizens has nearly $6.8 billion in reserves and is in the best financial shape ever. More importantly for Floridians, the risk of assessments – the “hurricane tax” – has been cut by more than half since 2011.
Despite such welcome news, I constantly remind myself that Citizens policyholders and all Floridians are only one major storm away from the need for hefty assessments. For now, however, there is much to be proud of.
Successful depopulation efforts took 312,550 policies off our books in 2013, helping reduce Citizens from a high of nearly 1.5 million policies in late 2012 to 1.1 million this November. By early 2014, we expect Citizens’ policy count to drop below 1 million for the first time since mid-2006.
Meanwhile, an eight-year hiatus from major storm activity has allowed Florida’s domestic insurance market to grow and mature, providing homeowners with more choices from financially stable, private-market companies.
The lull also has helped Citizens to make great strides toward achieving sound rates that properly reflect the true risks incurred for our policies. In 2013, about 26 percent of Citizens homeowners policies were actuarially sound. That percentage is expected to double to 52 percent in 2014.
Despite these successes, we know that Florida’s lucky streak cannot last forever. It is, therefore, critical that we continue our work to return Citizens to its role as Florida’s insurer of last resort.
On January 2, Citizens will launch the Property Insurance Clearinghouse, which will attempt to match homeowners seeking new Citizens policies with qualified, private-market companies willing to offer comparable coverage at competitive rates. By helping homeowners find coverage in the voluntary market, we believe the clearinghouse will reduce the number of new and renewal policies coming into Citizens, decreasing assessment risks for all Floridians.
As the Clearinghouse ramps up in early 2014, homeowners will have access to an expanding list of private-market companies, with at least 18 carriers participating by the time the clearinghouse is in full swing.
Citizens will remain available to protect homeowners who still are unable to find competitively priced, comprehensive coverage for their most treasured asset. Citizens will expand the clearinghouse service to include renewal customers by mid 2014.
As the 2014 hurricane season draws to a close and the holidays approach, there is much to be thankful for. Even as we count our blessings, however, Citizens won’t stop its efforts to improve service to our policyholders and reduce the risk borne by all Floridians when the wind again begins to blow.
