It was a bumpy start, but transitioning customers over to private insurers from Florida’s Citizens Property Insurance Corporation has now resulted in a book a third of the size at the same time it has helped brokers access clients normally lost to them.
When you are the insurer of last resort, it is considered progress when your base of insureds goes down, and so it is that Citizens announced it expects to have fewer than 500,000 policies in place by the beginning of next year. That’s down from 1.5 million policies a scant few years ago, with revenue falling from $3.2 billion to just under $1 billion.
CEO Barry Gilway is pointing to the benefits that accrue to private insurers, but also to a state struggling to limit its own exposure to the economic impact of catastrophic disasters. Brokers have also welcomed the transition as an opportunity to grow customer numbers with citizen who would normally have gone straight to the government agency.
Created out of a need to ensure that all Floridians would have access to property insurance, especially in coastal areas, the company grew quickly to become the largest property insurer in the state, and was then forced to begin culling its rolls, both to reduce state exposure and to create a more equitable market for private insurers.
Cycling down has not been easy or without controversy as many homeowners felt they were being pushed out of the company with little notice or recourse, but Citizens has recently improved its processes for transitioning people to private insurers.
