Citizens Insurance to Transfer Thousands of Policies to Private Insurers in 2024

Citizens Insurance, Florida’s insurer of last resort, is set to transfer a significant number of policies to various private insurance companies. According to Tim Cerio, CEO and president of Citizens, the company aims to move around 76,000 policies this month and approximately 338,000 throughout the year. This move is part of an ongoing effort to decrease its market share and mitigate risks of insolvency.

Currently, Citizens holds about 18% of the market, a share they are actively trying to reduce. This initiative follows concerns about the insurer’s financial stability, especially in the face of potential major hurricane damage. Florida Governor Ron DeSantis previously expressed concerns about Citizens’ solvency, stating that the insurer would struggle to pay out in the event of another major hurricane. These concerns were echoed by the US Senate Budget Committee, leading to an investigation into Citizens’ financial viability.

From a peak of 1.41 million policies in fall 2023, Citizens’ policy count has reduced to 1.24 million, as reported by the News Service of Florida. As part of the depopulation program, regulators have approved seven insurance companies to assume up to 200,000 policies from Citizens. HCI Group is one of these companies, having already assumed 59,800 policies from Citizens through its subsidiaries in late 2023, with plans to take on more policies this month. HCI Group’s chairman and CEO, Paresh Patel, noted that this move helped HCI reach over $1 billion in in-force premium, a significant milestone from its starting point of less than $740 million in in-force premium at the beginning of 2023.

This strategy of transferring policies to private insurers is a critical part of Citizens’ plan to ensure financial stability and maintain its role as an insurer of last resort in Florida.