TALLAHASSEE, Fla. – State-backed Citizens Property Insurance expects a reversal in its downsizing next year, a sign of a less-healthy insurance market in Florida.
President and CEO Barry Gilway told the Citizens board on Wednesday “we're expecting to go from about 442,000 policies back up to 500,000” policies. “When the market's healthy, companies are making money, depopulation (reducing the number of Citizens policies) soars,” Gilway said. “When the market is negative, depopulation drops.”
Gilway said the company anticipates it will see a decline in commercial-lines policies, while residential personal accounts will grow by about 66,000.
“We're losing in the profitable line and growing in the unprofitable lines,” Gilway said. “It's the nature of the beast.”
The overall number of policies would still be one-third of the Citizens policies in 2012, when the company handled about $500 billion in exposure. The company's exposure was about $115 billion as of Oct. 31. With the expected increase in policies next year, the exposure risk should be about $120 billion, Gilway said.
The update came as the overall insurance industry in Florida faces $6.3 billion in losses from Hurricane Irma, with 850,000 claims filed.
Citizens has accounted for 63,500 of the claims from the September storm, Gilway said. Most are in Miami-Dade, Broward and Monroe counties.
The company anticipates its number of Irma claims will grow to 70,000, with $1.2 billion in damages, over the next year.
Last week, the Office of Insurance Regulation approved a series of rate increases for Citizens customers, including an average 6.6 percent increase for homeowners' multi-peril policies.
Actual rate changes -- which begin May 1 -- will vary, based on factors such as the amount of coverage, the type of policy and the location of the property.