TALLAHASSEE — Efforts to shrink Citizens Property Insurance have brought the policy count for the state-run insurer to what officials herald as a record low.
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But they also caution that an upturn is bound to occur, though it shouldn’t be as dramatic as ones in the past due to new laws approved in 2022 and 2023.
Citizens Property Insurance President and CEO Tim Cerio told board members Tuesday in a conference call that depopulation strategies over the past couple of years put the policy count under Citizens at 278,662 as of last Friday.
“It seems that we are really at an all-time low for probable maximum loss for Citizens policy insurance, which is great news, and again attributable to the reforms,” Cerio said.
The policy count, and any potential exposure risk, is down from 1.41 million in October 2023 as financial problems in the private market caused homeowners to fall into Citizens, which became the state’s largest property insurer.
With the current numbers, Cerio cautioned that a more measured upturn is expected due to the changes in law that help speed the latest depopulation move.
“With the reforms, what we think we are going to see is, instead of a drastic increase if the market really turns south at some point, those increases and decreases would be more gradual. They wouldn’t be as drastic,” Cerio said. “That’s good news for consumers.”
The recent legislative changes targeted lawsuit costs incurred by insurers. The state also has benefited from a year without any hurricanes, which officials say has allowed some softening in homeowners insurance prices and growth in new carriers into the state.
State leaders have long sought to hold down the number of Citizens policies, at least in part because of financial risks if Florida gets hit by a major hurricane or multiple hurricanes.
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Citizens was created to provide a haven for homeowners who couldn’t find affordable coverage with a private carrier, but its policy counts have fluctuated significantly, depending on private market conditions.
Florida Insurance Commissioner Mike Yaworsky claimed at the June 9 Cabinet meeting the insurance market is the healthiest it’s been in at least a decade.
“There are well-capitalized companies ready for the oncoming hurricane season, should the worst happen,” Yaworsky said. “So, we find ourselves in a really good place.”
The policy count high in 2023 wasn’t the peak for Citizens, which reached 1.48 million policies near the end of 2012.
At that time a series of depopulation efforts were implemented, such as the “clearinghouse” where homeowners would be sent to a private firm when their coverage was within 15% of the offer by Citizens.
By 2019 Citizens had the count just under 420,000 policies.
Last week Gov. Ron DeSantis signed a bill (SB 1028) that will create a new clearinghouse for commercial policies and allow surplus lines insurers providing strong financial strength ratings to be considered for the policy takeouts.
Surplus lines insurers are companies not licensed in Florida but allowed to operate as an “eligible” insurer.
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News Service Assignment Manager Tom Urban contributed to this report.