Hurricane season officially ended this week leaving Florida unscathed for the ninth year in a row. The respite from pricey storm damage in the Sunshine State is leaving Citizens Property Insurance with a little more room to breathe.
The uneventful season yielded just eight named storms with only two considered major storms. None of those even threatened Florida.
The storm-free seasons have helped stabilize Florida’s property insurance market by expanding private-market coverage for property owners. That expansion has helped Citizens reduce its own exposure by shifting policies into the private market. That’s helping Citizens get back to its original role as Florida’s “insurer of last resort.”
“We have been fortunate to have avoided a major hurricane for nine years, but Florida must continue its preparation for the next major windstorm,” said Citizens Board of Governors Chairman Chris Gardner. “Citizens remains steadfast in its efforts to shore up its foundation and reduce assessment risk for Floridians by helping property owners find coverage outside Citizens and ensuring that we provide quality service to those who still count on Citizens to protect their homes and businesses.”
At the beginning of the 2014 hurricane season, Citizens had a nearly $300 billion exposure spread among more than 900,000 policies. By the end of the season policies decreased 21.8 percent to just 727,000. That cut Citizen’s exposure by more than $60 billion over the course of hurricane season. Exposure is down more than $85 billion since the beginning of the year.
The storm-free season is good news for policy holders too and not just because they avoided the headache of storm prep and cleanup. Because Citizens was able to build its surplus and reduce exposure, assessment risk for Floridians has decreased. That could lead to lower rates on policies.
“Citizens already is looking ahead to 2015, capitalizing on the growing strength and vibrancy of Florida’s private insurance market to increase consumer access to private-market insurance options through its Property Insurance Clearinghouse and Depopulation Program,” Citizens President and CEO Barry Gilway said. “The success of these programs, along with favorable pricing in the international reinsurance markets, put Citizens on an even stronger financial footing heading into 2015.”
The changes underway are also in part due to the Citizens’ Property Insurance Clearinghouse and depopulation program that helps policy holders find coverage outside of Citizens in the private marketplace.
The Office of Insurance Regulation recently approved requests by nine companies to remove up to 180,040 personal residential policies and 2,527 commercial residential policies this January. That means a good start for depopulation efforts next year.