Citizens falls below 1 million policies for the first time since 2006
Florida’s Citizens Property Insurance has announced that it has successfully reduced the number of policies it is responsible for to less than 1 million for the first time since 2006. The state-run insurer has been working to depopulate itself per the whims of the state Legislature. Lawmakers believe that depopulating the insurer of policies will help address several problematic financial issues. As such, the policies being released by Citizens are being acquired by private homeowners insurance companies throughout the state.
State-run insurer continues its depopulation efforts in order to resolve financial issues
The state-run insurer now reports that it has some 942,000 policies in effect, down 36% from the number of policies it accounted for in October of 2012. Since August of 2006, Citizens has represented more than 1 million active homeowners insurance policies in Florida. The insurer had represented the best place for homeowners to find the insurance coverage they need, but years of natural disasters and other issues have created a great deal of financial strain for the insurance provider.
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Releasing policies helps mitigate exposure to financial risk
Releasing policies lowers Citizens’ exposure to financial risk. As the risks it faces begin to diminish, so too does the financial strain that the insurer has been experiencing for several years. In an effort to promote depopulation, Citizens has been raising rates for its homeowners insurance policies. As coverage becomes more expensive, homeowners are seeking out alternative insurance providers. The insurer has also been forcibly removing policies from its portfolio, allowing private companies to acquire these policies.
Citizens finds some degree of financial stability through depopulation
Citizens’ officials note that claims exposure has fallen from $515 billion in November of 2011 to $302 billion currently. The decrease in claims exposure has also lead to a surplus in Citizens’ reserve capital, allowing the insurer to be more resilient to future natural disasters that may strike Florida. The state has managed to avoid a major hurricane for several years now, but property insurance coverage continues to grow more costly throughout Florida.