Duane Michael Wagner Vero Beach Florida

Florida Citizens CEO: Last-Resort Insurer Adds More Than 5,000 Policies Weekly

• By Renee Kiriluk-Hill
• June 28, 2021 11:24 AM (EDT)

TALLAHASSEE, Fla. //BestWire// – Citizens Property Insurance Corp. is adding more than 5,000 homeowners policies weekly and could have 750,000 in force by the end of the year, according to Chief Executive Officer Barry Gilway.

It has added more than 200,000 policies since September 2019, he said. “At this point in time we’re really the only game in town,” he said. “If anything, the pace is picking up.”

The insurer of last resort for Florida homeowners tracks the source of incoming policies. Five carriers are each shedding more than 500 policies monthly, said Gilway, as losses continue on copious litigated claims, 85,000 last year alone.

“There is virtually no county where litigation has not increased,” he said. “We get 1,000 new litigated claims per month.” In May, 45% were catastrophe-related from 2017’s Hurricane Irma. In Miami-Dade county, a “staggering” 53% of water claims were litigated over the past four years.

Earlier this year, the state Office of Insurance Regulation found Florida accounted for 8.16% of all homeowners’ claims opened by insurance companies in the United States, but 76.4% of all homeowners lawsuits opened against insurance companies in the United States (BestWire, May 11, 2021).

Losses are consuming capital in a state where the surplus-to-premium ratio was already “ridiculously low,” Gilway added. Homeowners writers can raise capital or reduce policies by withdrawing from geographies or tightening underwriting.

One carrier wanted to limit coverage to homes covered by roofs no more than five years old, but the OIR denied the restriction, Gilway noted.

Insurers started aggressively raising rates in 2019, he said, and now Citizens is the most-competitive option for coverage 95% of the time.

Gilway is optimistic that legislation intended to mitigate assignment of claims and legal one-way attorney fee provisions will improve the market. Pushing for change is a “step in the right direction,” he said.

Earlier in June, Florida Gov. Ron DeSantis said he will sign a comprehensive property insurance reform bill that he said is a beginning step in controlling a business climate dragged down by a tidal wave of litigation (BestWire, June 10, 2021). S.B. 76, among other things, will bar contractors from soliciting homeowners to file insurance claims and limit attorneys’ fees in homeowners lawsuits by setting a formula for calculating fees.

It will also allow larger annual rate increases for Citizens policyholders. Increases have been capped at 10%, but the bill will raise the limit gradually to 15%.

This year, Gilway said reinsurance prices have come in more favorably than forecast, buoyed by a strong global market taking a long-term view.

Gilway’s estimates of how many homeowners are forced to take Citizens’ last-resort coverage keep rising. In March, he said the policy count would be about 700,000 by the end of the year. He later increased the number to 724,000 a month (BestWire, May 11, 2021).

The top five writers of homeowners multiperil insurance in Florida in 2020, based on direct premiums written, were: Universal Insurance Holdings Group, with a 10.5% market share; Citizens Property Insurance Corp., 6.75%; State Farm Group, 6.04%; Tower Hill Group, 5.46%; and Progressive Insurance Group, 3.96%, according to BestLink.