• As Citizens Insurance continues to absorb more homeowners policies, state regulators approved a second tranche of policies to be offloaded to private insurers.
• About 125,000 policies will be migrated to private carriers in January, according to the Office of Insurance Regulation.
• State-backed Citizens Insurance also recently offloaded a large number policies to private insurers within the last month.

Florida regulators gave the green light on Tuesday for four insurance companies to assume up to 125,000 policies from the state’s Citizens Property Insurance Corp. in January. The move is an effort to reduce the size of Citizens, the state-backed insurer.

Insurance Commissioner Michael Yaworsky signed off on four orders allowing the transfer of policies as part of an ongoing “depopulation” initiative, a program designed to transition policies from Citizens to private insurance companies. Slide Insurance Co. will have the opportunity to take on up to 75,000 policies, Florida Peninsula Insurance Co. is set for 30,000, Edison Insurance Co. and US Coastal Property & Casualty Insurance Co. are both approved for 10,000 each. This information was detailed on the Florida Office of Insurance Regulation website.

However, the final number of policies that make the move from Citizens to the private companies is expected to be less than the approved amounts. The overarching goal is to decrease the number of policies under Citizens, alleviating concerns about potential financial pitfalls in the event of significant hurricane activity in the state.

Over the last three years, Citizens has seen a surge in its policy count due to various private insurers pulling back and increasing rates due to financial strain. As of last Friday, Citizens reported 1.331 million policies, a dip from 1.412 million earlier in the month. This decrease is attributed to the transfer of 99,773 policies to five private insurers in mid-October, another effort in the depopulation strategy. Future plans include additional policy transfers slated for November and December.

The trajectory of Citizens’ growth underscores the challenges faced by the insurance market in Florida. In 2020, the insurer reported 521,289 policies, which ballooned to 725,942 in 2021, and further jumped to 1,111,283 by October 2022.

Florida’s property insurance market is complex, shaped by factors such as frequent storm activity, including hurricanes, and litigation issues. The state has grappled with powerful hurricanes in recent years, leading to a spike in property insurance rates. However, the landscape may be shifting. After significant tort reform passed earlier this year and with only one major hurricane making landfall, insurance companies seem more open to expanding their presence in the Sunshine State. This renewed interest comes as a hopeful sign for a more balanced property insurance market in Florida.