Make us your home page
Instagram

Citizens Property Insurance CEO wants agency to cut costs further

Citizens CEO Barry Gilway supports the goal to reduce the insurer’s size, but disagrees with how coverage was slashed.

Associated Press

Citizens CEO Barry Gilway supports the goal to reduce the insurer’s size, but disagrees with how coverage was slashed.

ST. PETERSBURG — A cost-conscious Citizens Property Insurance is tightening its budgetary belt.

But a leaner, more efficient Citizens won't translate into rate relief for its 1.3 million policyholders statewide.

Barry Gilway, who became CEO of Citizens eight months ago, acknowledged Tuesday that a new travel expense policy that went into effect in October didn't go far enough. Not only will the state-run property insurer of last resort make its executives follow more stringent policies used by other state agencies — such as a $36-a-day limit for meals — but it expects other cost-cutting initiatives coming out of a comprehensive outside audit. One plan on the table to consolidate human resources could save up to $250,000.

"You can't spend money as a quasigovernmental agency the way you spend money in the private sector," Gilway said in a meeting with the editorial board of the Tampa Bay Times.

His comments came in the wake of a Times/Herald story this week that showed Citizens executives continued to lapse into charging expensive meals and running up some travel expenses despite a critical report from the state inspector general.

Gilway said he agrees with the legislative mandate to shrink Citizens' exposure to losses from a major hurricane, but disagrees with some previous policies. Specifically, he objected to how his predecessors slashed coverage levels and explicitly tried to make the company as unattractive as possible to push homeowners to actively seek coverage in the private market.

When he came on board, "we were frustrating every single policyholder that we had," Gilway said. "We were destroying our reputation with our customers. We cut their coverages left and right."

Despite renewed cost-cutting, cheaper reinsurance, fewer sinkhole claims, the buildup of $6 billion in reserves to pay future hurricane claims, a bond placement that saved Citizens $49 million and seven hurricane-free seasons, don't look for rates to go down.

Citizens is still far shy of what is considered "actuarially sound" rates for its exposure to hurricanes. If Citizens continues on the state-ordered glide path to raise rates on average up to 10 percent annually, more than 70 percent of its policyholders will reach those sound rates in four years, Gilway forecast.

Among other topics, Gilway:

• was enthusiastic that a clearinghouse set up to notify private insurers about policies slated to go into Citizens would keep more homeowners in the private market.

• said the 2011 changes in state sinkhole laws have had a "significant impact" in cutting claim payouts, but Citizens still pays out nearly twice what it collects in sinkhole premiums.

• floated the notion of a specialized fund to handle all sinkhole claims as one way to help cure Florida's property insurance woes.

• said loaning $350 million in surplus Citizens' funds to private insurers to take out policies would have been a good deal, but he recognized the perception that "you're giving away policyholder money to these greedy companies."

• defended recent pay raises to a handful of top executives that took on additional responsibilities after the elimination of another administrative position. But he acknowledged mistakes were made in extending raises to some others, ignoring the bulk of Citizens' 1,300 employees.

Times staff writer Susan Taylor Martin contributed to this report.

Citizens Property Insurance CEO wants agency to cut costs further 02/26/13 [Last modified: Tuesday, February 26, 2013 10:50pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. 'Road to Nowhere' is back: Next phase of Suncoast Parkway coming

    Roads

    Despite intense public opposition and dubious traffic projections, the Florida Department of Transportation has announced that construction of the toll road known as "Suncoast 2" is expected to start in early 2018.

    The Suncoast Parkway ends at U.S. 98 just south of Citrus County. For years residents have opposed extending the toll road, a project dubbed the "Suncoast 2" into Citrus County. But state officials recently announced that the Suncoast 2 should start construction in early 2018. [Stephen J. Coddington  |  TIMES]
  2. A sports rout on Wall Street

    Retail

    NEW YORK — Sporting goods retailers can't shake their losing streak.

  3. Grocery chain Aldi hosting hiring event in Brandon Aug. 24

    Retail

    BRANDON — German grocery chain Aldi is holding a hiring event for its Brandon store Aug. 24. It is looking to fill store associate, shift manager and manager trainee positions.

  4. Lightning owner Jeff Vinik backs film company pursuing global blockbusters

    Corporate

    TAMPA — Jeff Vinik's latest investment might be coming to a theater near you.

    Jeff Vinik, Tampa Bay Lightning owner, invested in a new movie company looking to appeal to a global audience. | [Times file photo]
  5. Trigaux: Look to new Inc. 5000 rankings for Tampa Bay's future heavyweights

    Business

    There's a whole lotta fast-growing private companies here in Tampa Bay. Odds are good you have not heard of most of them.

    Yet.

    Kyle Taylor, CEO and founder of The Penny Hoarder, fills a glass for his employees this past Wednesday as the young St. Petersburg personal advice business celebrates its landing at No. 25 on the 2017 Inc. 5000 list of the fastest growing private companies in the country. Taylor, still in his 20s, wins kudos from executive editor Alexis Grant for keeping the firm's culture innovative. The business ranked No. 32 last year. [DIRK SHADD   |   Times]