After Hurricane Irma stung property insurers for $6.3 billion in claims and counting, Florida’s state-run and second-largest carrier expects to add customers in 2018.
“We’re expecting to go from 442,000 back to 500,000,” Barry Gilway, president of Citizens Property Insurance Corp., told the company’s board about its customer count in a meeting Wednesday.
Citizens has not always been right in its own forecasts, initially failing to predict it would get as small as it has from a high of about 1.5 million customers several years ago.
But as private insurers’ appetite for new business grew during Florida’s 11-year hurricane hiatus ending in 2016, now it is predicted to weaken in Irma’s wake. Many private companies limit their risk exposure, particularly in southeast Florida, for reasons ranging from hurricane risk to assertions that claim costs in the region are abusively inflated by contractors, public adjusters and lawyers.
Citizens customers are free to choose other options in the marketplace where available, but most of its policyholders switch to private insurers through state-administered transfers, such as letters offering to move them to another company. In some cases, such as when private companies offer similar or lower rates compared to Citizens in a state “clearinghouse,” customers do not have a choice to remain with Citizens.
Even at a reduced size, Citizens remains the state’s second largest insurer. Growing to 500,000 customers next year would represent about a 14 percent increase.
The company’s risk exposure, or the value of the properties it covers, is expected to grow from about $112 billion to $120 billion, Gilway said.
Citizens has about 42,000 customers in Palm Beach County.