Louisiana Citizens’ Policy Count Continues to Decline

The policy count for Louisiana’s property insurer of last resort is set to drop again next year.

Louisiana Insurance Commissioner Jim Donelon announced that the total policy count for Louisiana Citizens Property Insurance Corporation (Citizens) will approach 54,500 with the most recent round of depopulation. That’s down from a high of 174,000 policies in 2008 following Hurricane Katrina.

During the depopulation process Citizens opens up its book of business for the transfer of policies to the private market. In this round, eight companies will receive 10,304 residential policies this year, dropping the personal lines policy count to about 52,500 residential policies.

Donelon said the decline in the number of Citizens’ personal lines policies through the process of depopulation has exceeded expectations.

“We were optimistic that the total policy count would dip below six figures — but to see Citizens reduce its policy count so dramatically in this short amount of time really speaks to the strength of the competition in our state,” said Donelon said in an announcement released by the Louisiana Department of Insurance. He congratulated Chief Executive Officer Richard Newberry, Chief Operating Officer Vijay Ramachandran and the rest of Citizens’ leadership team for the accomplishment.

Two companies, Excalibur National Insurance Co. and Spinnaker Insurance Co., are participating for the first time. Access Home Insurance Co., Capitol Preferred Insurance Co., Maison Insurance Co., Ocean Harbor Casualty Insurance Co., Safepoint Insurance Co., and Southern Fidelity Insurance Co. have all previously participated in depopulation.

In 2017, Citizens will have an estimated 0.8 percent of the Louisiana homeowners market — down from 9.8 percent in 2008.

While not part of the depopulation process, Citizens also has been sheding commercial insurance policies. It had 4,900 commercial policies 2013; today it has fewer than 2,200 policies — a drop of more than 50 percent.

Citizens rates also have been going down. An overall -5.9 percent rate reduction in commercial rates is set to take effect Feb. 1, 2017, and a statewide personal lines rate cut of -2.4 percent took effect June 1.

Consumers whose policies are selected for depopulation will be notified by Citizens by letter. Policyholders will have 60 days from the date on the letter to opt out of the assumption and choose to stay with Citizens.