Thoughthe number of policies in force at state-run Citizens Property Insurance Corp. appears to havebottomed out earlier inthe year, a review of recently released Florida personal and commercialresidential property insurance data finds strong year-over-year growth by anumber of private carriers during the second quarter.
maintained its position as the Sunshine State's largest individual personal andcommercial residential property insurer based upon its 564,439 policies inforce in the applicable lines as of June 30, according to a database maintainedby the Florida Office of Insurance Regulation. The subsidiary surpassed Citizens in that regard during the fourth quarter of 2015.
Citizens'personal and commercial residential property insurance policies in forcedeclined by 12.4% during the final three months of that year, reflecting robustdepopulation activity. Its quarter-over-quarter rates of decline in the firstand second quarters of this year were considerably lower at 2.5% and 0.1%,respectively. Among the top eight writers of personal and commercialresidential property coverage in Florida as of June 30 (not includingState Farm Florida InsuranceCo., the State FarmMutual Automobile Insurance Co. affiliate that considers itsFlorida quarterly supplemental reports to be a trade secret), only Citizens sawits policy count in the applicable lines decline on a year-over-year basis.
Fourof those companies, FederatedNational Holding Co.'s Federated National Insurance Co., ,Heritage Insurance HoldingsInc.'s HeritageProperty & Casualty Insurance Co. and 's produced double-digit percentage increases in personal andcommercial residential property policy counts.
ForHeritage Property & Casualty, though its year-over-year rate of growth inFlorida personal and commercial residential property policies in force was13.9%, its policy count declined sequentially during the second quarter by4.6%.
"We are focused on expanding our footprint outside ofFlorida," said Heritage Insurance Holdings Chairman and CEO Bruce Lucasduring an August conferencecall. "That is the main driver of our growth."
Heritage Property & Casualty was by far the largestparticipant in the Citizens depopulation program during 2015, removing 36.6% ofthe 272,785 policies taken out by private carriers. The volume of policiesremoved through the first nine months of 2016 by Heritage Property &Casualty and private carriers, overall, is well behind the 2015 pace, but the company'srate of participation has increased to 41%.
Lucas added that the "vast majority" of the more recent takeout opportunitiesfor Citizens business involved policies in the tri-county region of southFlorida, but said that Heritage Property & Casualty does "not have anincreased appetite in the tri-county for personal lines."
Citizens'personal and commercial residential property policies in force in thetri-county region declined at a slightly slower year-over-year pace than on astatewide basis. The company had 238,328 policies in force as of June 30 in theapplicable lines in the counties of Palm Beach, Broward and Miami-Dade, wherethe company has indicated that it faces a crisis related to the assignment ofbenefits on non-weather-related water claims, down 16.3% from the same date in2015.
Thetri-county area policies accounted for 50.1% of Citizens' statewide total inthe personal and commercial residential property lines, up from 49% a yearearlier. Excluding policies specifically classified by FLOIR as wind-only, theyear-over-year rate of decline in the tri-county policy count was just below10%. The resulting business accounted for 41% of the company's personal andcommercial residential property policies in force, up from 37.2% as of June 30,2015.
Citizensofficials warned that the assignment-of-benefits issue has caused markets toshut down in south Florida, leaving the state's insurer of last resort asessentially the only outlet for new business. Unlike private carriers, thecompany's ability to raise rates to address rising loss costs is limited by thestate's statutory glide path.
HeritageProperty & Casualty's personal and commercial residential property policiesin force in the tri-county region increased to 35.4% of its 254,505-policystatewide total as of June 30, up from 32.9% of 212,490 policies a yearearlier. Federated National generated by far the highest level ofyear-over-year growth in tri-county personal and commercial residentialproperty policies in force among the state's 15-largest carriers in theapplicable lines as its policy count in that region soared by 42.5% to 63,010as compared with less than 25% on a statewide basis. Its personal residentialcondominium unit-owners' policies in force nearly doubled on a year-over-yearbasis to 20,155, fueling the company's tri-county expansion.
"Ourfocus is to grab a lot more of the market in Florida," Federated NationalPresident and CEO Michael Braun said during a September
"Thisis not a market that's dominated by the national carriers," he added."This is dominated by small Florida companies, and I don't think we shouldlose to any one of them when there's a possibility of writing new business orretaining the business. So we've got a long way to go in Florida."