Assumption Requests Top 300,000
Two insurers have been authorized to assume up to a combined 100,000 policies from Citizens Property Insurance Corporation in December 2012, on the heels of assumption requests for November totaling up to 210,000 policies. With almost 90,000 policies removed earlier this year, private market interest in Citizens assumptions is up dramatically this year compared to recent years.
The requested assumptions are taking place under Citizens’ existing program. Meanwhile, Citizens has been working on additional programs that might further incentivize assumptions. When Citizens first began evaluating the additional programs earlier this year it was seeing less private market interest in assumptions and was looking for ways to reduce its policy count and potential need to levy assessments. To some degree, this has been taking place on its own this fall as the private market is rebounding and starting to see additional capital deployed.
Even after the round of assumptions this fall, Citizens’ policy count will be significant and it will have considerable concentrations in South Florida and Central West Florida. The next step in reducing Citizens’ size and exposure will be tackling how to address market perceptions that rates in those areas are not adequate for the risks insurers will insure and the reinsurance costs they will encounter.