State-run Citizens Property Insurance's policy count has shrunk to its lowest level since its creation 10 years ago.
CEO Barry Gilway told his board Wednesday that his company, which insures property owners who cannot find coverage on the open market, had fallen to 598,408 policies as of March 13. Barring a major storm, Citizens could see its footprint dwindle to 450,000 Florida policies, he predicted.
Created in 2002 in a merger of the state's wind pool and former state-run property insurer known as the JUA, Citizens exploded in size as major insurers such as State Farm cut back covering what's viewed as the country's most hurricane-susceptible state. As recently as November 2012, Citizens handled nearly 1.5 million policies.
The turnaround has been dramatic. "The reality is that significant improvements in profitability and the increasing financial strength of private companies has been a major factor in our ability to return to our role as the state's insurer of last resort," Gilway said in Maitland.
Among the reasons Citizens is no longer a dumping ground for policies:
• Nine hurricane-free years have helped Florida's property market recover.
• Small Florida-based insurers have significantly added business with cheaper operating costs and cheaper reinsurance, the coverage insurers buy to cover claims.
• Citizens has pushed policies to private insurers and made itself less attractive by raising rates and cutting back coverage.
The state insurer has one over-arching reason behind its mission to be as small as possible: Every Floridian with insurance is at risk of being assessed if Citizens cannot pay claims after a catastrophe.