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Citizens Property Insurance Corp., the Florida state-run insurer of last resort, is anticipating its policyholder count will increase in 2018 for the first time since its efforts to shed policies through depopulation began several years ago.

As it moves on from a tumultuous 2017 that included a major hurricane and ongoing assignment of benefits (AOB) abuse, Citizens executives said at its board of governors meeting last week that it anticipates more than 60,000 policyholders from private insurance companies will return to the state-run insurer of last resort.

Citizens President, CEO and Executive Director Barry Gilway told the board at the Dec. 13 meeting that the Florida domestic insurance market’s combined ratio and surplus have declined, and the majority of Florida insurers experienced negative net income for the first time in five years.

While the active 2017 storm season is one factor contributing to deteriorating insurer results, the biggest factor is increasing costs from nonweather-related losses and AOB abuse fueled by attorneys and contractors. The industry has started taking steps to limit losses from AOB, with some insurers not writing in certain areas of the state where it is the rampant.

Citizens, which is statutorily obligated to offer coverage when the private market will not, will have to pick up these policies. Gilway said he expects Citizens will see significantly less depopulation next year.

“When the market is healthy, and companies are making money, depopulation soars; when it becomes negative, depopulation drops. We are not expecting a lot of depopulation next year,” Gilway said.

Instead, Gilway said, Citizens is expecting its overall policy count of 442,000 – the lowest it has been since the company was formed in 2002 – to climb back up to around 500,000. Citizens policy count reached a high of 1.4 million before the depopulation program began in 2012.

Please read the full article below;

https://www.insurancejournal.com/news/southeast/2017/12/20/474844.htm

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