Citizens Insurance nearly under 500,000 policies
Not many companies celebrate losing customers and watching their business shrink. But that is exactly what Barry Gilway, president of the state-run Citizens Property Insurance Corporation was doing this morning.
At a board of governors meeting for the company in Maitland, Gilway said Citizens is down to 509,000 policies and by the end of the month will likely be under 500,000 policies. The company in 2011 had nearly 1.5 million policies. The result has been a drop in revenue from premiums from $3.2 billion at one point, to under $1 billion expected in 2016.
“We’ve had a pretty extraordinary year,” Gilway said.
Citizens has been under political pressure to reduce its share of Florida’s property insurance market since 2011. Citizens was intended to be an insurer of last resort, but instead became the state’s largest insurance company over time, especially after the historic 2004 hurricane season when four storms hit the state.
But since 2011, the state has been on an aggressive “depopulation” campaign over the last four years, where the state has tried to push customers out of Citizens toward private companies. But some have questioned the tactics, saying many people were shifted out of Citizens without proper notification. Citizens has reformed some of its policies to give homeowners who don’t want to be pushed out of Citizens, a better opportunity to opt out.
But while depopulation is going in the right direction, Gilway said Citizens is facing a growing crisis on water claims coming from the Miami-Dade. Despite fewer policies, Citizens is facing increasing cases that have to be litigated - largely due to a surge in water loss claims. In 2013, Citizens had 6,303 litigated claims re-opened. In 2014, that jumped to 7,307. This year, Citizens is at 8,214 litigated claims re-opened. Gilway said the litigation related to water claims has been “insane.”
“Miami-Dade is out of control,” Gilway said.
Gilway said the result has been that even though overall policy holders are decreasing, Citizens is staffing up with adjusters that can handle water damage issues.