Citizens Property Insurance Corp. to Become Florida's Largest Insurer

Florida's insurance market has been struggling to recover after two punishing hurricane seasons, with many insurers forced to provide millions of dollars in cash from their parent companies to help pay for damages. The state's insurer of last resort, Citizens Property Insurance Corp., is set to become the largest home insurer in Florida as a result of the liquidation of Poe Financial Group's three insurance companies. As of July 1, Citizens will hold up to 1.2 million policies, making it the largest state-run home insurer in the nation.

Key Takeaways:

• Citizens Property Insurance Corp. will become the largest home insurer in Florida as a result of the liquidation of Poe Financial Group's three insurance companies, holding up to 1.2 million policies.
• The transition will make Citizens the largest state-run home insurer in the nation, surpassing other coastal states' insurers of last resort.
• The growth of Citizens is a sign of the continued instability in Florida's insurance market, with two punishing hurricane seasons forcing many insurers to provide millions in cash from their parent companies.
• The hardening of the Florida market and the looming threat of another bad hurricane season raise concerns about potential insolvencies and the ability of private companies to absorb claims.
• Homewise Preferred Insurance Co. has offered to take 50,000 of the Poe policies, but the bulk of the business will end up in Citizens.
• Citizens' growth is also concerning due to the state's reliance on the insurer, which was created to be a backstop in the market, not a major player.

Statistics:

• 330,862 policies formerly held by Poe Financial Group's three insurance companies will be transferred to Citizens Property Insurance Corp. as of July 1.
• Citizens will hold up to 1.2 million policies, making it the largest state-run home insurer in the nation.
• The shaking of the Florida market resulted in a total of 286,335 policies, about 5,000 more than they had in the last quarter of 2005, which will be transferred to Citizens.
• It took only two bad storm seasons to make Citizens the state's largest insurer.
• Florida's insurance market has a history of instability, with many insurers being forced to provide millions of dollars in cash from their parent companies to help pay for damages.

Sources:

• The Palm Beach Post, "State-backed Citizens to become largest insurer in Florida: Click here to read the full article", Published Jun. 20.
• Christine Turner, Citizens Property Insurance Corp. spokeswoman