FLORIDA
Florida Citizens Asking for 13.5% Rate Increase Across Personal, Commercial Lines
TALLAHASSEE, Fla. //BestWire// - Florida’s Citizens Property Insurance Corp. is seeking a 13.5% increase across its personal and commercial lines, the state's insurer of last resort said during an Aug. 1 rate hearing.
Looking at line level rates, the carrier is asking for a 13.9% increase for personal multiperil policies, a 15% increase for personal wind-only coverage and a 10.3% increase for commercial lines.
By law, carrier’s rates must be actuarially sound and noncompetitive with the private market. This is done to ensure it is truly used as a last resort, but the legislature’s placed annual caps on rate hikes so policyholders wouldn’t be shocked by huge increase. However, even if Citizens received a 14% rate increase, the statutory maximum increase of 2025, 98% of its policies would still be competitive with the admitted voluntary market, Brian Donovan, Citizens’ vice president and chief actuary, said during the rate hearing.
To achieve a level that would be non-competitive, personal multiperil policies would need a 92.8% rate increase, he said.
Further, a 14% increase would not make the rates actuarially sound, according to the company. For example, personal multiperil rates would have to be increased 23.1% to be actuarially sound, while commercial rates would need a 27.9% lift.
While it is not there yet, the company's rates are getting closer to being actuarial sound, according to Donovan, who said the litigation rate for non-natural catastrophe cases has improved and is moving the needle in the right direction.
“This savings reduces the probability and severity of assessments to all Floridians,” he said. “However, despite this good news, we're not out of the woods yet.”
Research from the Insurance Information Institute also showed legislative reforms have helped slow rates. The trade organization reported 2023 Florida home insurance premiums were 80% lower than it had initially projected (BestWire, June 27, 2024).
As of July 26, Citizens has 1.2 million policies in force, up from 1.6 million to start the year, according to data from the company.
During 2023, the company was the largest home insurer in the state with a 18.57% market share, according to BestLink. The remaining largest writers of home insurance in Florida during 2023, based on direct premiums written, were: Universal Insurance Holdings Group, 8.47%; State Farm Group, 6.88%; Florida Peninsula Group, 4.88%; and Tower Hill Group, 4.35%.
(By Steve Hallo, senior associate editor, BestWire: Steve.Hallo@ambest.com)