Florida Citizens encouraged as policy count falls below 1m for first time in two years

Florida’s Citizens Property Insurance Corporation, the state’s insurer of last resort, said that it is encouraged as its policy count falls below 1 million or the first time in two years, with encouraging signs being seen in Florida property insurance market dynamics.

Florida Citizens explained that the number of policies it has in-force declined to 987,650 as of November 29th 2024.

That’s down from 1,036,913 as of October 31st, but more impressively it has now fallen from just over 1.4 million as of September 30th 2023.

The Citizens Depopulation Program, which sees policies transferred back to private insurance market players, has proven very effective and is seen as the main driver of this decline.

“Since January 2024, the program has transferred more than 428,000 Citizens policies to private insurance companies approved by the Office of Insurance Regulation,” Florida Citizens explained.

While there is still a flow of new policies into Citizens as well, this too is an area showing positive signs.

“Citizens is seeing a reduction in the flow of new policies into Citizens. This trend also reflects a renewed interest by new and existing private companies to enter or expand in the Florida market,” the insurer said.

“These are encouraging signs as we continue our efforts to return to our role as Florida’s insurer of last resort,” explained Tim Cerio, Citizens’ President/CEO and Executive Director. “As Citizens shrinks, so does the risk of assessments on Floridians who are not Citizens policyholders. This should be welcome news to all.”

The policy count is now down by 19.5% since January 2024, which has effectively reduced Florida Citizens exposure by around $200 billion.

With a further December round of depopulation scheduled, the Citizens policy count is expected to drop to close to 900,000 policies by the end of this year.

However, while exposure is down for Florida Citizens, this hasn’t stopped the insurer planning to purchase more in reinsurance and catastrophe bond backed risk transfer for 2025.

As we reported last week, Citizens staff are currently projecting a need to budget for a larger tower of reinsurance and catastrophe bonds in 2025, with almost $4.5 billion of risk transfer being discussed.

Driving this though, is the fact that surplus has reduced at the bottom of the Florida Citizens funding tower, while the insurer of last resort is also projecting it will have less protection from the Florida Hurricane Catastrophe Fund (FHCF) in place.

Presumably surplus has been eroded by the major hurricanes that struck Florida in 2024, while the FHCF coverage may shrink in-line with the overall exposure that Citizens holds, resulting in a need to potentially buy more risk transfer this year.

However, at a Board meeting yesterday the cost of coverage was a contentious topic, with some calling for a significant push to get rates-on-line secured at a lower level in 2025, with Citizens reinsurance broker’s likely to be pushed to secure a stronger execution of its risk transfer placements next year.