After years of jettisoning customers, Florida’s last-resort insurer expects to get bigger in 2017 — returning to more than half a million policies.
“We’ve entered a different stage,” Citizens Property Insurance Corp. president Barry Gilway told the company’s board in a meeting Wednesday. “There’s very little interest in depopulation.”
Depopulation is Citizens-speak for helping customers find their way to private insurers, part of the state-run company’s mission. But as Florida’s 11-year hurricane-free streak came to an end in 2016 with Hermine and Matthew, several private companies have blamed inflated non-storm claims as the main reason they are shunning new business, particularly in South Florida.
Now Citizens sees a net gain to its rolls.
A “best estimate” discussed Wednesday puts Citizens at more than 504,000 policies in 2017, up from 472,207 as of last Friday. A high-end estimate projects more than 577,000 customers.
About one in 10 of its customers lives in Palm Beach County. Citizens remains one of the state’s two largest property insurers.
It’s a significant change from the mass exodus that saw the company shrink from a high near 1.5 million customers in the past four years.
The appetite for new business among private companies is waning, statistics show.
Offers from private carriers approved by regulators to take Citizens customers have dwindled to less than 45,000 for January and February of 2017, Gilway said.
Avatar Property and Casualty Insurance Co. (10,899 offers approved), Safepoint Insurance Company (15,000) and Southern Oak Insurance Company (15,000) are among the companies making pitches by February, state regulators said Wednesday.
That’s well below the hundreds of thousands of offers in a similar period a year ago. And in any case, fewer Citizens customers have been taking the offers over the last year.
Citizens officials expect as few as 10,000 will actually switch by February, and that will likely not exceed the typical flow of new and returning customers in that period.
Company officials repeated calls for state legislators to address what they calls abuses in claims where contractors, attorneys or other third parties take control of insurance benefits — particularly in cases such as water damage from a plumbing leak. That’s the most common type of non-catastrophe claim, and industry officials say the worst abuses have been in Miami-Dade and Broward counties, though Palm Beach County is often lumped in to the discussion.
For their part, contractors and attorneys have argued insurance companies are crying wolf and trying to lowball consumers or curtail their rights to representation. Their side has mostly prevailed in the courts and legislature in recent years.
There also may be room for Florida’s relatively small and unproven private companies to become more competitive, not just on price but also on service. A Citizens official read a letter Wednesday from a customer grateful for the company’s prompt response to hurricane damage, compared to neighbors unable to make contact quickly with private competitors. The consumer referred to a car insurance commercial where a customer says, “Maybe you have the wrong insurance company.”
Source: Palm Beach Post