Citizens and the Florida residential property market: how to return to an insurer of last resort

Developments in 2020 have heightened concerns regarding market disruptions, which could result in increases in Citizens Property Insurance Corporation's (Citizen's) exposure. As a result, Citizens contracted with Florida State University (FSU) to conduct an analysis of Citizens' exposure and identify: 1) opportunities to reduce its exposure; and 2) ways to increase the availability of private market residential property insurance. The FSU study finds that while Citizens has real opportunities to effectively reduce its exposure in the long term, a combination of strategies will be necessary to ensure the adequacy of rates and solvency of private insurers operating in the residential property market. Additionally, several actions must first be taken to improve the attractivenss of the Florida market and increase the capacity of the private market before changes to the structure of Citizens can be made. Finally, the FSU study notes that to achieve Citizens' goal of reducing its exposure, the issue of affordability of homeowners insurance may need to be addressed outside of the insurance process.